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September 28, 2017 Deidre Lee Chairperson Section 809 Panel 1400 Key Blvd. Suite 210 Arlington, VA 22209 Dear Ms. Lee, The Coalition for Government Procurement appreciates the opportunity to provide input to the Section 809 Panel. As you requested during our Spring Conference earlier this year, we have completed a list of specific recommendations, including line-in/line-out changes. Our recommendations follow several themes:

• Reducing unnecessary regulations on industry

• Empowering successful acquisition management

• Strengthening interagency contracts to ensure that DoD contracting officers can make informed contracting choices

We would be happy to answer any questions that you or the other Commissioners may have about our recommendations. Regards, Roger Waldron President, Coalition for Government Procurement

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Table of Contents 1. Labor Qualifications ................................................................................................................. 3

2. Remove BIC Designations ....................................................................................................... 5

3. Evaluating Price at the Task and Delivery Order ................................................................. 7

4. Permanent Sun-Setting ........................................................................................................... 12

5. Eliminating the Burden to Report Executive Compensation ............................................ 14

6. Raise the Micro-Purchase Threshold to $10,000 ................................................................. 18

7. Require Debriefings over the Simplified Acquisition Threshold ..................................... 21

8. Reform the Lowest Price Technically Acceptable Source Selection Process .................. 24

9. System for Award Management Database .......................................................................... 26

10. Career-Based Support for Acquisition Workforce Professionals ..................................... 29

11. Facilities Need DPAP Approval for MIL STD 129 ............................................................. 33

12. Improve FedBizOpps ............................................................................................................. 35

13. Identifying and Measuring Key Performance Indicators for Contract Personnel,

Program Managers, and Organizations ............................................................................... 36

14. Improving Performance-Based Acquisition ........................................................................ 37

15. The GSA Multiple Award Schedules ................................................................................... 38

16. Price Reductions Clause – Multiple Award Schedule ....................................................... 39

17. Transactional Data Reporting – GSA Multiple Award Schedule..................................... 42

18. Duplicative Special Item Numbers ....................................................................................... 47

19. Develop Alternative Methods for Pricing GSA Schedule Contracts. .............................. 49

20. Implement OLM ...................................................................................................................... 53

21. The Commercial Supplier Agreement ................................................................................. 57

22. Changes to the Auditing Process .......................................................................................... 64

23. Add Cost Reimbursement Capabilities ............................................................................... 74

24. Improve the eBuy Platform ................................................................................................... 80

25. Determining Fair and Reasonable Pricing on Schedule Orders ....................................... 81

26. Reform Procedures for Blanket Purchase Agreements ..................................................... 84

27. Business Case Analyses for Certain Interagency and Agency-Specific Acquisitions ... 87

28. Shifting the Preference from Open Market to Existing Vehicles ...................................... 89

29. Assisted Acquisition Centers of Excellence ......................................................................... 92

30. Online Marketplaces ............................................................................................................... 94

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Labor Qualifications Current State:

Increasingly, high tech and cybersecurity specialists are obtaining qualifications and

certifications instead of college degrees. This trend is posing a problem for the Federal

Government which will create highly prescriptive labor categories, which in turns limits

access to innovative contractors. Recognizing this trend in 2000, Congress passed a

provision which restricted the use of minimum education requirements for the

procurement of IT services. In accordance with the 2001 National Defense

Authorization Act, this requirement was codified into FAR 39.104. Despite the efforts of

Congress, agencies are still creating overly prescriptive labor categories.

Recommendation:

Revise FAR 39.104 to discourage the addition of labor qualifications at the IDIQ-level

Rationale:

Visionaries of technology, such as Bill Gates, Steve Jobs, and Mark Zuckerberg would

not be able to work on some government information technology contracts, because

they did not complete college. Particularly in the information technology sector, work

experience and certifications can be as important, if not more important, than a college

degree. By limiting labor restrictions at the IDIQ level, the ordering activity can make

the ultimate decision about the appropriate labor qualifications.

Members have also reported that an unintended side effect of these prescriptive labor

categories is that they are sometimes written without appropriate equivalencies, which

ultimately prevents veterans from qualifying for the work.

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Line-in/Line-out:

FAR Change:

Subpart 39.104 – Information Technology Services.

(a) When acquiring information technology services, solicitations must not describe any

minimum experience or educational requirement for proposed contractor personnel

unless the contracting officer determines that the needs of the agency—

(1)(a) Cannot be met without that requirement; or

(2)(b) Require the use of other than a performance-based acquisition (see Subpart

37.6).

(b) When acquiring information technology services agencies should not describe any

minimum experience or education requirement for proposed contractor personnel in

Indefinite Delivery/Indefinite Quantity contracts.

(1) Ordering activities may describe minimum experience or education

requirements for proposed contractor personnel in task orders issued against

Indefinite Delivery/Indefinite Quantity contracts if the conditions of 39.104(a)

are met.

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Remove BIC Designations

Current State:

In December 2014, the Office of Federal Procurement Policy (OFPP) issued the

memorandum entitled Transforming the Marketplace: Simplifying Federal Procurement to

Improve Performance, Drive Innovation, and Increase Savings. The memorandum

introduced the concept of Category Management and “Best-in-Class” (BIC) to Federal

Procurement. OFPP later established the Category Management Leadership Council

(CMLC), which would be responsible for determining BIC contracts, and issued

Government-Wide Category Management, Guidance Document, which provided guidance

for determining BIC contracts. The CMLC has designated at least 18 contracts as BIC. In

October 2016, OFFP released a proposed circular to implement Category Management.

Recommended Action:

The Coalition recommends OFPP rescind the Government-Wide Category Management,

Guidance Document and revoke the charter for the Category Management Leadership

Council.

Rationale:

First, as a threshold matter, it remains unclear what, if any, statutory authority exists to

support the mandatory designation for BIC contracts by OMB. To date, OMB has yet to

provide any statutory authority for its designation. Second, as a policy matter,

mandatory contract vehicles could lead to significant risk for government and industry.

Without vigilance, a well-intended cross-functional team could designate “winners and

losers” through mandatory contract solutions for customer agencies and contractors in

an attempt to manage the market. Such an approach will limit access to ongoing

commercial competition and innovation, as well as negatively impact the small business

community. Finally, it should be noted that the draft circular makes no provision for

industry input when selecting a BIC contract solution.

See:

• OFPP and Category Management: Pressing the Pause Button, December 1, 2016

• The Unintended Consequences of Category Management’s Best-in-Class (BIC

Approach?, December 8, 2016

• Coalition Response to Draft Circular

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Line-in/Line-out:

None required, OFPP has the authority to take action on these recommendations.

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Evaluating Price at the Task and Delivery Order Current State:

For Indefinite Delivery/Indefinite Quantity (IDIQ) contracts, the government must

evaluate price of the offerors before an award can be made. When orders are placed

against the IDIQ, agencies will often reevaluate price reasonableness of the contractor.

For example, DoD is required to make fair and reasonable price determinations when

using the Schedules, even though GSA has already made a fair and reasonable price

determination. The 2017 NDAA changed this process, allowing DoD to make multiple

award IDIQ service contract awards without a fair and reasonable price determination,

leaving that decision to the ordering activity.

Recommendation:

Expand the 2017 NDAA language to apply to civilian agencies.

Rationale:

The provision in the 2017 NDAA is a simple, common sense reform that should be

extended to civilian agencies as well. DoD is a significant user of the GSA Schedules,

and this provision would benefit the Schedules by improving the flexibility of their use

creating more flexibility. It should be noted that the idea of an unpriced Schedule was

also was advocated by the SARA panel in their 2007 report to Congress, and DoD

recommended this change for inclusion in the 2018 NDAA.

Ultimately, competition at the task order level for known requirements will drive better

value to the agencies.

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Line-in/Line-out:

Legislative Change:

SEC. ___. EXCPTION TO REQUIREMENT TO INCLUDE COST OR PRICE TO THE

GOVERNMENT AS A FACTOR IN THE EVALUATION OF PROPOSALS

FOR CERTAIN MULTIPLE-AWARD TASK OR DELIVERY ORDER

CONTRACTS AND CERTAIN FEDERAL SUPPLY SCHEDULE

CONTRACTS

Section 3306(c) of title 41, United States Code, is amended—

(1) in paragraph (1), by inserting “except as provided in paragraph (3),” in

subparagraphs (B) and (c) after the subparagraph designation; and

(2) by adding at the end of the following new paragraph:

“(3) EXCEPTIONS FOR CERTAIN INDEFINITE DELIVERY, INDEFINITE QUANTITY

MULTIPLE AWARD CONTRACTS AND CERTAIN FEDERAL SUPPLY SCHEDULE CONTRACTS

FOR SERVICES ACQUIRED ON AN HOURLY RATE.—If the head of an agency issues a

solicitation for two or more contracts for services to be acquired on an hourly rate basis

under the authority of sections 4103 and 4106 of this title (multiple award task or

delivery order contracts) or section 152(3) of this title and section 501(b) of title 40

(Federal Supply Schedule contracts), then—

“(A) when the contracts feature individually competed task or delivery

order based on or built up from hourly rates, the contracting officer need not

consider cost or price as an evaluation factor for contract award;

“(B) the disclosure requirement of subparagraph (C) or paragraph (1) shall

not apply; and

“(C) cost or price to the Federal Government shall be considered in

conjunction with the issuance pursuant to section 4106(c) of this title of any task

or delivery order under and contract resulting from the solicitation.”.

Changes to Existing Law:

TITLE 41, UNITED STATES CODE

§3306. Planning and solicitation requirements

(a) PLANNING AND SPECIFICATIONS.—

(1) PREPARING FOR PROCUREMENT.—In preparing for the

procurement of property or services, an executive agency shall—

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(A) specify its needs and solicit bids or proposals in a manner

designed to achieve full and open competition for the procurement;

(B) use advance procurement planning and market research; and

(C) develop specifications in the manner necessary to obtain full

and open competition with due regard to the nature of the property or

services to be acquired.

(2) REQUIREMENTS OF SPECIFICATIONS.—Each solicitation under this

division shall include specifications that—

(A) consistent with this division, permit full and open competition;

and

(B) include restrictive provisions or conditions only to the extent

necessary to satisfy the needs of the executive agency or as authorized by

law.

(3) TYPES OF SPECIFICATIONS.—For the purposes of paragraphs (1)

and (2), the type of specification included in a solicitation shall depend on the

nature of the needs of the executive agency and the market available to satisfy

those needs. Subject to those needs, specifications may be stated in terms of—

(A) function, so that a variety of products or services may qualify;

(B) performance, including specifications of the range of acceptable

characteristics or of the minimum acceptable standards; or

(C) design requirements.

(b) CONTENTS OF SOLICITATION.—In addition to the specifications described

in subsection (a), each solicitation for sealed bids or competitive proposals (other than

for a procurement for commercial items using special simplified procedures or a

purchase for an amount not greater than the simplified acquisition threshold) shall at a

minimum include—

(1) a statement of—

(A) all significant factors and significant subfactors that the

executive agency reasonably expects to consider in evaluating sealed bids

(including price) or competitive proposals (including cost or price, cost-

related or price-related factors and subfactors, and noncost-related or

nonprice-related factors and subfactors); and

(B) the relative importance assigned to each of those factors and

subfactors; and

(2)(A) in the case of sealed bids—

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(i) a statement that sealed bids will be evaluated without

discussions with the bidders; and

(ii) the time and place for the opening of the sealed bids; or

(B) in the case of competitive proposals—

(i) either a statement that the proposals are intended to be

evaluated with, and the award made after, discussions with the offerors,

or a statement that the proposals are intended to be evaluated, and the

award made, without discussions with the offerors (other than discussions

conducted for the purpose of minor clarification) unless discussions are

determined to be necessary; and

(ii) the time and place for submission of proposals.

(c) EVALUATION FACTORS.—

(1) IN GENERAL.—In prescribing the evaluation factors to be included in

each solicitation for competitive proposals, an executive agency shall—

(A) establish clearly the relative importance assigned to the

evaluation factors and subfactors, including the quality of the product or

services to be provided (including technical capability, management

capability, prior experience, and past performance of the offeror);

(B) except as provided in paragraph (3), include cost or price to the

Federal Government as an evaluation factor that must be considered in

the evaluation of proposals; and

(C) except as provided in paragraph (3), disclose to offerors

whether all evaluation factors other than cost or price, when combined,

are—

(i) significantly more important than cost or price;

(ii) approximately equal in importance to cost or price; or

(iii) significantly less important than cost or price.

(2) RESTRICTION ON IMPLEMENTING REGULATIONS.—Regulations

implementing paragraph (1)(C) may not define the terms “significantly more

important” and “significantly less important” as specific numeric weights that

would be applied uniformly to all solicitations or a class of solicitations.

(3) EXCEPTIONS FOR CERTAIN INDEFINITE DELIVERY, INDEFINITE

QUANTITY MULTIPLE AWARD CONTRACTS AND CERTAIN FEDERAL

SUPPLY SCHEDULE CONTRACTS FOR SERVICES ACQUIRED ON AN

HOURLY RATE.—If the head of an agency issues a solicitation for two or more

contracts for services to be acquired on an hourly rate basis under the authority

of sections 4103 and 4106 of this title (multiple award task or delivery order

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contracts) or section 152(3) of this title and section 501(b) of title 40 (Federal

Supply Schedule contracts), then—

(A) when the contract or contracts feature individually competed

task or delivery orders based on, or built up from, hourly rates, the

Contracting Officer need not consider cost or price as an evaluation factor

for contract award;

(B) the disclosure requirement of subparagraph (C) of paragraph

(1) shall not apply; and

(C)(1) cost or price to the Federal Government shall be considered

in conjunction with the issuance pursuant to section 4106(c) of this title of

a task or delivery order under any contract resulting from the solicitation.

(2) Upon the issuance of such a task order, an executive agency shall then

disclose to offerors whether all evaluation factors other than cost or price,

when combined are –

(i) significantly more important than cost or price;

(ii) approximately equal in importance to cost or price; or

(iii) significantly less important than cost or price.

(d) ADDITIONAL INFORMATION IN SOLICITATION.—This section does not

prohibit an executive agency from—

(1) providing additional information in a solicitation, including numeric

weights for all evaluation factors and subfactors on a case-by-case basis; or

(2) stating in a solicitation that award will be made to the offeror that

meets the solicitation's mandatory requirements at the lowest cost or price.

(e) LIMITATION ON EVALUATION OF PURCHASE OPTIONS.—An executive

agency, in issuing a solicitation for a contract to be awarded using sealed bid

procedures, may not include in the solicitation a clause providing for the evaluation of

prices for options to purchase additional property or services under the contract unless

the executive agency has determined that there is a reasonable likelihood that the

options will be exercised.

(f) ***

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Permanent Sun-Setting

Current State:

On May 10, 2012, Executive Order (“EO”) 13610, “Identifying and Reducing Regulatory

Burdens,” authorized the Office of Information and Regulatory Affairs (“OIRA”) to

coordinate retrospective reviews of existing regulations. Specifically, consistent with EO

13563, agencies are directed to report to OIRA the status of their internal “periodic

reviews” of existing regulations, which seek to identify opportunities to streamline,

expand, repeal regulations.

Recommended Action:

The Coalition recommends a permanent sun-setting for all procurement regulations,

which are not required by statute. New regulations should expire after five years.

Existing regulations should be revised to include an expiration date no greater than five

years. In order to effectively manage this process, the expiration dates for regulations

should be spread out to limit the burden to the Government.

Rationale:

Currently, the Code of Federal Regulations (“CFR”) exceeds 185,000 pages, and in Fiscal

Year 2016, the Federal government issued nearly 96,000 pages of regulatory notices

through the Federal Register. In this environment, it is imperative to ensure that

regulations are being regularly reviewed and updated for relevance.

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Line-in/Line-out:

Legislative Change:

SEC. ___. PERMENANT SUNSETTING OF ACQUISITION REGULATIONS

(a) For all future changes to the Federal Acquisition Regulations, Agency-Specific

Supplemental Regulations, and Class Deviations from the Federal Acquisition

Regulations, which are not required by statute, agencies will specify an expiration

date not to exceed five years from implementation of the regulation

(b) For all existing Federal Acquisition Regulations, Agency-Specific Supplemental

Regulations, and Class Deviations from the Federal Acquisition Regulations, which

are not required by statute, agencies will revise the regulations to add an expiration

date, which is not to exceed five years from the enactment of this Act.

(c) Temporary Extensions

(1) Agencies may issue temporary extensions of Federal Acquisition Regulations,

Agency-Specific Supplemental Regulations, and Class Deviations from the

Federal Acquisition Regulations, which are not required by statute, for no

longer than a period of 18 months, provided that a rulemaking process has

begun to replace the regulation prior to the exercise of the temporary

extension.

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Eliminating the Burden to Report Executive Compensation

Current State:

In 2006, Congress passed the Federal Funding Accountability and Transparency Act of

2006 (Public Law 109-282, as amended, codified at 31 USC 6101 note), which required

the Office of Management and Budget to create a single, searchable website that

contains information on contractors and grantees. As a result of this act,

USAspending.gov was created in 2007. The FFATA was revised by Section 6202 of the

Government Funding and Transparency Act of 2008, which required that awardees

(including first tier subcontractors) report the names and total compensation of the five

most highly compensated officers of the entity if the entity received 80 percent of more

of its annual gross revenues in Federal awards; had $25 million or more in annual gross

revenue; and if the public does not have access to compensation information through

periodic reports.

Recommended Action:

Eliminate the requirement to report executive compensation

Rationale:

The Department of Defense has recommended that Congress reduce the burden of this

provision, noting that “generally executive compensation data is not used in making

procurement decisions.” Although there are exceptions to the reporting if the data is

already publicly available, the entities still must report this data in the System for

Award Management and reference the public availability. Additionally, the FAR

Council estimates that the reporting leads to 55,000 hours of paperwork burden each

year. Further, over half of the respondents affected by this burden are small businesses.

All told, there is no apparent, offsetting public policy good for this identified burden.

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Line-in/Line-out:

Legislative Change:

SEC. ___.ELIMINATION OF EXECUTIVE COMPENSATION REPORTING

REQUIREMENTS APPLICABLE TO CONTRACTS OR SUBCONTRACTS

The Federal Funding Accountability and Transparency Act of 2006 (Public Law 109-282; 31

U.S.C 6101 note), as amended, is amended by deleting Section 2(b)(1)(F).

Regulatory Change:

31 U.S.C 6101 note and FAR 4.14

SEC.2 FULL DISCLOSURE OF ENTITIES RECEIVING FEDERAL FUNDING

* * *

(b)In General.—

(1)Website.—Not later than January 1, 2008, the Office of Management and

Budget shall, in accordance with this section, section 204 of the E-Government Act of

2002 (Public Law 107–347; 44 U.S.C. 3501 note), and the Office of Federal Procurement

Policy Act ([former] 41 U.S.C. 403 [401] et seq.) [now division B (except sections 1123,

2303, 2304, and 2313) of subtitle I of title 41], ensure the existence and operation of a

single searchable website, accessible by the public at no cost to access, that includes for

each Federal award—

(A) the name of the entity receiving the award;

(B) the amount of the award;

(C) information on the award including transaction type, funding agency,

the North American Industry Classification System code or Catalog of

Federal Domestic Assistance number (where applicable), program source,

and an award title descriptive of the purpose of each funding action;

(D)the location of the entity receiving the award and the primary location

of performance under the award, including the city, State, congressional

district, and country;

(E)a unique identifier of the entity receiving the award and of the parent

entity of the recipient, should the entity be owned by another entity;

(F)the names and total compensation of the five most highly compensated

officers of the entity if—

(i)the entity in the preceding fiscal year received—

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(I)80 percent or more of its annual gross revenues in Federal

awards; and

(II)$25,000,000 or more in annual gross revenues from Federal

awards; and

(ii)the public does not have access to information about the

compensation of the senior executives of the entity through

periodic reports filed under section 13(a) or 15(d) of the Securities

Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of

the Internal Revenue Code of 1986. [; and]

(F)(G) any other relevant information specified by the Office of

Management and Budget.

Subpart 4.14—Reporting Executive Compensation and First-Tier Subcontract Awards

4.1400 Scope of subpart.

This subpart implements section 2 of the Federal Funding Accountability and

Transparency Act of 2006 (Pub. L. 109-282), as amended by section 6202 of the

Government Funding Transparency Act of 2008 (Pub. L. 110-252), which requires

contractors to report subcontract award data and the total compensation of the five

most highly compensated executives of the contractor and subcontractor. The public

may view first-tier subcontract award data at https://www.usaspending.gov.

4.1401 Applicability.

(a) This subpart applies to all contracts with a value of $30,000 or more. Nothing in this

subpart requires the disclosure of classified information.

(b) Reporting of subcontract information will be limited to the first-tier subcontractor.

4.1402 Procedures.

(a) Agencies shall ensure that contractors comply with the reporting requirements

of 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards.

Agencies shall review contractor reports on a quarterly basis to ensure the information

is consistent with contract information. The agency is not required to address data for

which the agency would not normally have supporting information, such as the

compensation information required of contractors and first-tier subcontractors.

However, the agency shall inform the contractor of any inconsistencies with the

contract information and require that the contractor correct the report, or provide a

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reasonable explanation as to why it believes the information is correct. Agencies may

review the reports at http://www.fsrs.gov.

(b) When contracting officers report the contract action to the Federal Procurement Data

System (FPDS) in accordance with FAR Subpart 4.6, certain data will then pre-populate

from FPDS, to assist contractors in completing and submitting their reports. If data

originating from FPDS is found by the contractor to be in error when the contractor

completes the subcontract report, the contractor should notify the Government

contracting officer, who is responsible for correcting the data in FPDS. Contracts

reported using the generic entity identifier allowed at FAR 4.605(c)(2) will interfere with

the contractor’s ability to comply with this reporting requirement, because the data will

not pre-populate from FPDS.

(c) If the contractor fails to comply with the reporting requirements, the contracting

officer shall exercise appropriate contractual remedies. In addition, the contracting

officer shall make the contractor’s failure to comply with the reporting requirements a

part of the contractor’s performance information under Subpart 42.15.

(d) There is a reporting exception in 52.204-10(g) for contractors and subcontractors

who had gross income in the previous tax year under $300,000.

4.1403 Contract clause.

(a) Except as provided in paragraph (b) of this section, the contracting officer shall

insert the clause at 52.204-10, Reporting Executive Compensation and First-Tier

Subcontract Awards, in all solicitations and contracts of $30,000 or more.

(b) The clause is not prescribed for contracts that are not required to be reported in the

Federal Procurement Data System (FPDS) (see Subpart 4.6).

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Raise the Micro-Purchase Threshold to $10,000

Current State:

The micro-purchase threshold demarks the dollar threshold level, below which, orders

are exempt from many acquisition regulations. The micro-purchase threshold is

currently $5,000 for DoD and $3,500 for civilian agencies.

Recommended Action:

Raise the micro-purchase threshold to $10,000 for both civilian agencies and the

Department of Defense.

Update 41 U.S.C. 1908 to require that thresholds in government procurement be

reevaluated every year instead of every five years.

Rationale:

Increasing the micro-purchase threshold has been advocated by DoD as a way to

improve the speed the procurement system. Ultimately the change would affect less

than one percent of total contract spending, yet still increase the speed of thousands of

transactions, with which, there is minimal risk to the government from a price

standpoint. Indeed, over the past decade, agencies have developed a number of systems

designed to reduce the risk of fraud, waste, abuse, and misuse of government purchase

cards. This includes government-wide metrics collected through the GSA SmartPay

program, which provides the opportunity to identify the misuse of purchase cards.

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Line-in/Line-out:

Legislative Change:

SEC. ___. MICRO-PURCHASE THRESHOLD APPLICABLE TO GOVERNMENT

PROCUREMENTS

(a) INCREASING IN THRESHOLD.—Section 1902(a)(1) of title 41, United States Code, is

amended—

(1) by striking “section 2338 and 2339” and inserting “section 2339,” and

(2) by striking “$3,000” and inserting “$10,000.”

(b) CONFORMING AND CLERICAL AMENDMENTS.—(1) Section 2338 of title 10, United

States Code, is repealed.

(2) The table of sections at the beginning of chapter 137 of such title is amended

by striking the item relating to section 2338.

(c) ADJUSTING FOR INFLATION.—Section 1908(c)(2), United State Code, is amended—

(1) by striking “evenly divisible by 5,”

Changes to Existing Law:

TITLE 41, UNITED STATES CODE

§1902 Procedures applicable to purchases below micro-purchase threshold

(a) Definition.—

(1) Except as provided in sections 2338 and 2339 of title 10 and paragraph (2)

of this subsection, for purposes of this section, the micro-purchase

threshold is $10,000 $3,000.

****

§1908 Inflation adjustment of acquisition-related dollar thresholds

****

(c)Requirement for Periodic Adjustment.—

(2) ADJUSTMENT.—On October 1 of each year evenly divisible by 5, the Council

shall adjust each acquisition-related dollar threshold provided by law, as

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described in subsection (b)(1), to the baseline constant dollar value of that

threshold.

****

FAR Change:

Subpart 2.1—Definitions

“Micro-purchase threshold” means $10,000$3,500, except it means—

(1) For acquisitions of construction subject to 40 U.S.C. chapter 31, subchapter IV,

Wage Rate Requirements (Construction), $2,000;

(2) For acquisitions of services subject to 41 U.S.C. chapter 67, Service Contract Labor

Standards, $2,500; and

(3) For acquisitions of supplies or services that, as determined by the head of the

agency, are to be used to support a contingency operation or to facilitate defense

against or recovery from nuclear, biological, chemical or radiological attack as

described in 13.201(g)(1), except for construction subject to 40 U.S.C. chapter 31,

subchapter IV, Wage Rate Requirements (Construction) (41 U.S.C. 1903)—

(i) $20,000 in the case of any contract to be awarded and performed, or purchase

to be made, inside the United States; and

(ii) $30,000 in the case of any contract to be awarded and performed, or purchase

to be made, outside the United States.

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Require Debriefings over the Simplified Acquisition Threshold

Current State:

Currently, FAR 15.506 requires agencies to provide a debriefing for Part 15 acquisitions,

if a vendor makes a written requires within 3 days of contract award. Additionally, FAR

16.505 requires debriefings for task orders on Indefinite Delivery contracts that are

greater than $5.5 million. OFPP released its third “Myth-Busters” Memo in 2017, which

provided agencies with guidance on conducting effective debriefings, and, in particular,

noted that “to maximize the return on its acquisition investment and to ensure access to

high-quality solutions, the Federal government must ensure it conducts productive

interactions with its industry partners.”

Recommended Actions:

Require debriefings for task orders, delivery orders, blanket purchase agreements, and

contracts over the simplified acquisition threshold (SAT).

Rationale:

Requiring debriefings for contracts over the SAT would lead to an increased burden for

contracting officers, but the policy change will also create significant benefits. The

change will lead to increased communications between government and industry and

an understanding of the drivers of the given transaction, all adding to the knowledge

and experience base of the parties for future engagements. Additionally, it would help

reduce bid protests by ensuring that unsuccessful bidders have access to information

that clarifies the rationale underpinning the procurement decision.

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Line-in/Line-out:

Regulatory Change:

15.506 Postaward debriefing of offerors.

(a)(1) An offeror, upon its written request received by the agency within 3 days after the

date on which that offeror has received notification of contract award in accordance

with 15.503(b)for all awards valued in excess of the simplified acquisition threshold,

shall be debriefed and furnished the basis for the selection decision and contract award.

(2) To the maximum extent practicable, the debriefing should occur within 5 days after

receipt of the written request the notification of contract award in accordance with

15.503(b). Offerors that requested a postaward debriefing in lieu of a preaward

debriefing, or whose debriefing was delayed for compelling reasons beyond contract

award, also should be debriefed within this time period.

(3) An offeror that was notified of exclusion from the competition (see 15.505(a)), but

failed to submit a timely request, is not entitled to a debriefing.

(4)(i) Untimely debriefing requests may be accommodated.

(ii) Government accommodation of a request for delayed debriefing pursuant

to 15.505(a)(2), or any untimely debriefing request, does not automatically

extend the deadlines for filing protests. Debriefings delayed pursuant

to 15.505(a)(2) could affect the timeliness of any protest filed subsequent to the

debriefing.

(b) Debriefings of successful and unsuccessful offerors may be done orally, in writing,

or by any other method acceptable to the contracting officer.

(c) The contracting officer should normally chair any debriefing session held.

Individuals who conducted the evaluations shall provide support.

(d) At a minimum, the debriefing information shall include—

(1) The Government’s evaluation of the significant weaknesses or deficiencies in

the offeror’s proposal, if applicable;

(2) The overall evaluated cost or price (including unit prices) and technical

rating, if applicable, of the successful offeror and the debriefed offeror, and past

performance information on the debriefed offeror;

(3) The overall ranking of all offerors, when any ranking was developed by the

agency during the source selection;

23

(4) A summary of the rationale for award;

(5) For acquisitions of commercial items, the make and model of the item to be

delivered by the successful offeror; and

(6) Reasonable responses to relevant questions about whether source selection

procedures contained in the solicitation, applicable regulations, and other

applicable authorities were followed.

(e) The debriefing shall not include point-by-point comparisons of the debriefed

offeror’s proposal with those of other offerors. Moreover, the debriefing shall not reveal

any information prohibited from disclosure by 24.202 or exempt from release under the

Freedom of Information Act (5 U.S.C. 552) including—

(1) Trade secrets;

(2) Privileged or confidential manufacturing processes and techniques;

(3) Commercial and financial information that is privileged or confidential,

including cost breakdowns, profit, indirect cost rates, and similar information;

and

(4) The names of individuals providing reference information about an offeror’s

past performance.

(f) An official summary of the debriefing shall be included in the contract file.

(g) For the purposes of this section, the term “award” includes the award of a contract

under 15.503, task orders, delivery orders, and blanket purchase agreements.

24

Reform the Lowest Price Technically Acceptable Source Selection Process

Current State:

Currently, Part 15.101-2 of the FAR defines the Lowest Price Technically Acceptable

(“LPTA”) source selection process to be, “…appropriate when best value is expected to

result from selection of the technically acceptable proposal with the lowest evaluated

price.” Pursuant to a March 2015 memorandum from the Undersecretary of Defense for

Acquisition, Technology, & Logistics (“AT&L”), LPTA is only appropriate when:

1. There are well-defined requirements

2. The risk of unsuccessful contract performance is minimal

3. Price is a significant factor in the source selection

4. There is neither value, need, nor willingness to pay for higher performance

Recommended Action:

The Coalition recommends that the LPTA source selection process be removed from the

best value continuum and modified to ensure its appropriate application.

Rationale:

FAR Part 1.102 states, “[t]he vision for the Federal Acquisition System is to deliver on a

timely basis the best value product or service to the customer, while maintaining the

public’s trust and fulfilling public policy objectives.” [Emphasis added.] Under these

circumstances, the identification of an LPTA source selection process unnecessarily

introduces risks, confusion, and complexity into the award review and analysis, which

could undermine the ability of the Federal government to access innovative solutions,

increase performance challenges, and limit best value competition. Simply put, on a

best value continuum, a buyer should always be trying to achieve their maximum

utility and technical acceptability at the lowest price.

25

Line-in, Line-out:

FAR Change:

15.101-2 15.102 -- Lowest Price Technically Acceptable Source Selection Process.

(a) The lowest price technically acceptable source selection process is appropriate when

best value is expected to result from selection of the technically acceptable proposal

with the lowest evaluated price.

(b) The lowest price technically acceptable process may only be used when the

following conditions exist:

(1) The requirements of the procurement are well defined;

(2) The risk of unsuccessful contract performance is minimal;

(3) Price is the sole determining factor in the source selection; and

(4) There is neither value, need, nor willingness to pay for higher performance

(b)(c) When using the lowest price technically acceptable process, the following apply:

(1) The evaluation factors and significant subfactors that establish the

requirements of acceptability shall be set forth in the solicitation. Solicitations

shall specify that award will be made on the basis of the lowest evaluated price

of proposals meeting or exceeding the acceptability standards for non-cost

factors. If the contracting officer documents the file pursuant to 15.304(c)(3)(iii),

past performance need not be an evaluation factor in lowest price technically

acceptable source selections. If the contracting officer elects to consider past

performance as an evaluation factor, it shall be evaluated in accordance

with 15.305. However, the comparative assessment in 15.305(a)(2)(i) does not

apply. If the contracting officer determines that a small business’ past

performance is not acceptable, the matter shall be referred to the Small Business

Administration for a Certificate of Competency determination, in accordance

with the procedures contained in Subpart 19.6 and 15 U.S.C. 637(b)(7)).

(2) Tradeoffs are not permitted.

(3) Proposals are evaluated for acceptability but not ranked using the non-

cost/price factors.

(4) Exchanges may occur (see 15.306).

26

System for Award Management Database

Current State:

All companies wishing to do business with the U.S. Government must be registered in

the online System for Award Management (“SAM”) database. This registration process

requires companies to input information covering administrative, functional, and

financial areas. It also acts as a standing representation to the U.S. Government of the

registrant’s compliance with various facets of procurement law, for example, labor and

trade requirements. Not all representations addressed in the registration apply

universally to all companies, as some are industry-specific, yet all companies must

understand and respond to the registration inquiries as a threshold “right” to contract

with the government. Moreover, the representations are often based in regulations or

statutes and can be complicated to even a trained government contracts lawyer, when

in reality, the SAM administrator at most businesses is not an attorney, much less an

attorney well-versed in the nuances of FAR provisions. Not all companies have the

resources to consider the intricacies of certain these questions and answer them

accurately, thus creating a two-fold issue: 1. Exposing businesses to unnecessary risk of

misrepresentation and 2. Discouraging small businesses from entering the market.

Recommended Action:

The Coalition recommends that the SAM registration process by streamlined to remove

redundancies, clarify questions, and allow registrants to opt-out of making

representations for regulations that do not apply.

Specifically, the following representations should be addressed:

• Streamline the Federal Awardee Performance and Integrity Information System

questions (FAPIIS) (FAR 52.209-5, 52.209-7; 52.209-11 (Certificate Regarding

Responsibility Matters, Information Regarding Responsibility Matters, and

Representation by Corporations Regarding Delinquent Tax Liability or a Felony

Conviction under any Federal Law, respectively). There are currently multiple

complex and burdensome representations aimed at the same goal: determining

contractor integrity for responsibility assessment. According to Section 872 of the

Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, the

purpose of FAPIIS is to “significantly enhance the Government’s ability to

evaluate the business ethics and quality of prospective contractors competing for

Federal contracts and to protect taxpayers from doing business with contractors

that are not responsible sources.” (Emphasis added). However, as implemented

this rule imposes burdensome obligations on contractors that reach beyond the

27

information required under the policy in FAR Part 9 that defines what is

necessary to determine a contractor’s responsibility. See FAR 9.104-2, General

Standards, see also FAR 9.104-3, Application of Standards. While the FAR policy

on responsibility makes clear the importance of integrity, ethics, and ability to

perform, the unique and complex set of questions posed by FAPIIS are

unnecessary to meet that need.

• Reconsider the necessity of obtaining the information gathered through industry

and work-specific representations such as those listed below, or, at a minimum

allow contractors to opt-out by selecting “Not Applicable”:

o FAR 52.222-41 Service Contract Act and associated questions (52.222-48; -

52 – these are very poorly worded representations that only apply to

companies who provide services)

o 52.223-1, Biobased Product Certification. This provision applies to

solicitations that require the delivery or specify the use of USDA–

designated items; or include the clause at 52.223-2, Affirmative

Procurement of Biobased Products Under Service and Construction

Contracts.

o 52.223-4, Recovered Material Certification. This provision applies to

solicitations that are for, or specify the use of, EPA–designated items.

o 52.223-9, with its Alternate I, Estimate of Percentage of Recovered Material

Content for EPA–Designated Products (Alternate I only).

o 52.223-22, Public Disclosure of Greenhouse Gas Emissions and Reduction

Goals–Representation. This provision applies to solicitation that include

the clause at 52.204-7.

• Eliminate the following representations

o 52.227-6, Royalty Information and 52.227-15, Representation of Limited

Rights Data and Restricted Computer Software. These representations are

contract specific and should not be included in a standing representation

in an online database – there are more efficient and practical ways to

obtain this information when needed.

o 52.204-17, Ownership or Control of Offeror and 52.204-20, Predecessor of

Offeror. These clauses were implemented to provide additional

information to a contracting officer regarding the history and integrity of a

company. There are more efficient means of obtaining information

suitable to determine whether a contractor is worthy of receiving US

funds.

28

Rationale:

SAM is intended to be an information gathering tool by the government - not a barrier

for businesses to enter the market or a minefield of liability exposure for potential

misrepresentations made in good faith. Over time, however, it has expanded beyond

what is necessary to enable the government to make informed contracting decisions.

The representations noted above address approximately half of the representations

arising under the SAM registration. They are complex and overly burdensome for the

quality of information obtained and do not take into account the many shapes and sizes

of the companies seeking to contract with the government. Streamlining clauses, and

eliminating or allowing companies to opt-out of others would help improve this

database without hamstringing the government from its ability to adequately assess a

contractor’s integrity and capability to perform.

Line-in, line-out:

None, the General Services Administration already has the authority.

29

Career-Based Support for Acquisition Workforce Professionals

Current State:

Professional development of the acquisition workforce is essential to improving the

efficiency of the procurement system. Recent trends raise concerns. The average

contracting officer has 13 years of experience, whereas fifteen years ago they had 20

years of experience. Additionally, the acquisition process is complex, as is the

technology acquired, which, itself, has evolved and continues to evolve rapidly. This

technology must be reduced to requirements that are understood and that promote

competition. With such complexity and tasks associated with the process, it is

imperative that the acquisition workforce have access to effective professional

development.

Recommended Actions:

Congress should direct OFPP to develop guidance requiring training in market research

and competition. Additionally, Congress should direct OFPP to set minimum IT

graduation requirements for all acquisition personnel and require more advanced

training for those in the IT career path. Moreover, agency adherence enforcement of

these requirements for their personnel should be evaluated in the context of

program/budget requests to assure that the appropriate stewardship exists for the

approval and funding being sought. Finally, Congress should authorize the creation of

an industry exchange program for Government program managers. OFPP should

establish guidance that requires participation to achieve career advancement.

Rationale:

Given the critical missions served, the increasing demand for technological fluency, and

the overarching importance of their function to the nation, the acquisition workforce

must be professionally supported and compensated to assure a continuity of

expertise. To this end, the government should be updating and enhancing acquisition

workforce education, areas of specialization, and professional development. Further,

an industry exchange program would help to improve communications between

government and industry as well as provide program managers with insights into the

commercial sectors.

30

Line-in/Line-out:

Legislative Change:

SEC. ___. CAREER-BASED SUPPORT FOR THE ACQUISITION WORKFORCE

(a) OFFICE OF FEDERAL PROCUREMENT POLICY GUIDANCE.—

(1) Not later than one year after the date of the enactment of this Act, the

Administrator for Federal Procurement Policy shall issue guidance, which:

A. Develops additional training opportunities for the acquisition

workforce in market research and competition

B. Creates an industry exchange program for acquisition

professionals

C. Provides incentives for the acquisition workforce to utilize these

resources

OMB Circular No. A-11 Change:

51.3 Analysis of resources

Use a tabular presentation to identify the financial and personnel resources required at

the program levels under consideration. For all Information Technology (IT) budgetary

resources and for all major IT investments, include also a breakout of resources

(financial, and if available, personnel) within each program level. The tabular

presentation should include in its title the phrase "IT Table" and identify, by each major

IT investment, the IT investment title, its unique investment identifier (UII), all principal

supported program names, and the IT investment's budget authority level (PY, CY, and

BY).

The table should reflect the resources associated with the actual program dollars going

to this IT investment. All justifications should clearly show in text and tables the IT

investment request within each bureau, account, and program activity level. Your

justification materials should include a section beginning with the words "IT Resource

Statements" that provides the following:

(a) A statement from the CIO indicating the extent to which the CIO has

reviewed and had significant input in approving IT Investments included in this

budget request. For example, if the CIO has reviewed and approved all the

Investments from bureau/component/Operating Division/Mode A, B, and C,

31

but not D, then the statement must identify that the CIO reviewed and approved

Investments from bureau/component/Operating Division/Mode A, B, and C.

(b) A statement from the Chief Financial Officer (CFO) and CIO identifying the

extent to which the CIO had a significant role in reviewing planned IT support

for major programs and significant increases and decreases in IT resources

reflected in this budget, along with a statement that acquisition training

necessary to facilitate any associated procurement activity has been provided to,

and completed by, the acquisition organization associated with the activity for

which approval and funding are being sought.

(c) An update of the CIO's common baseline rating for Element D ("D1. CIO

reviews and approves major IT Investment portion of budget request"):

1) Incomplete – Agency has not started development of a plan describing

the changes it will make to ensure that all baseline FITARA

responsibilities are in place.

2) Partially Addressed – Agency is working to develop a plan describing

the changes it will make to ensure that all baseline FITARA

responsibilities are in place.

3) Fully Implemented – Agency has developed and implemented its plan

to ensure that all common baseline FITARA responsibilities are in place.

(d) The extent to which the CIO can certify the use of incremental development.

For example, if the CIO can certify that all the Investments from

bureau/component/Operating Division/Mode A, B, and C, but not D, are using

incremental development practices then the statement must identify that the CIO

certifies that Investments from bureaus/components/Operating

Divisions/Modes A, B, and C are using incremental development practices.

The above statements and discussion must also be included in your agency's annual

assurance statement described in OMB Circular No. A-123 Management’s

Responsibility for Enterprise Risk Management and Internal Control and your agency’s

public Congressional Justification materials. Additional details on ERM requirements

are also included in section 270. To the extent possible, you should attempt to align

your budget accounts with programs, distinguishing among components that

contribute to different strategic objectives. This should relate program objectives

(see section 240) and budget accounts or sub-accounts. In addition, you should include

the full cost of a program where possible. In some cases, you may want to consider

requesting budgetary resources to cover all indirect costs in the budget account or

program activity that funds the program, and paying for all central services as they are

32

used. In other cases, you may want to request appropriations for some central accounts

providing support services; in these cases, you should include a table showing the full

cost of resources used by each program, whether paid from its budget account or not.

Present resources required for PY and CY, as well as the estimated requirements for

each funding option for BY through BY+9, where applicable. If CY cancellations or

supplementals are pending or proposed, identify these separately. A subsidiary

breakdown of such items as personnel compensation, capital outlay, or other categories

of special concern would be useful. Generally, present financial data in terms of new

budget authority and outlays. However, your OMB representative may require

additional measures, such as unobligated balances and offsetting collections.

Describe budgetary resources requests in the context of your management plan for the

programs and activities. Describe resources requested for IT investments in the context

of your program requirements. For IT expenditures proposed, demonstrate that all

opportunities for coordination with Administration goals and eliminating redundant

activities have been explored. Explain the analysis used to determine the

resources needed to accomplish program and Administration goals, and demonstrate

that all opportunities for making more efficient and effective use of resources have been

explored.

33

Facilities Need DPAP Approval for MIL STD 129

Current State:

MIL-STD-129 (applicable to DoD ordering activities) and FED-STD-123 (applicable to

civilian agencies) are government-unique requirements related to the marking of units,

unit packages, and unit loads that are being shipped to military facilities and supply

centers. Shipments to these destinations are required to have various data elements,

which are provided for display on the individual unit, the package of units, and the

load of unit packages being delivered and stored. Recently, a cross-organizational team

from GSA determined that compliance with MIL-STD-129 and FED-STD-123 would be

strictly enforced on all GSA Schedules orders without exception.1

Recommended Action:

The Coalition recommends that new requirements be implemented for facilities to

obtain approval from DPAP prior to the use of MIL-STD-129 in the acquisition of

commercial items.

Rationale:

Coalition members report that the mandatory application of the standards to contracts

increases costs, creates government-unique processes, and enhances their risks. Despite

the burden MIL-STD-129 poses to contractors, there are reasons why a facility would

need to use MIL-STD-129, therefore the Coalition recommends that DPAP create an

approval process for facilities to use MIL-STD-129, and publish a list of the facilities that

have received approval in order to help companies provide better service to their

customers.

1 See: http://thecgp.org/images/MIL-STD-129-GSA-January-5-response-Received-January-26-1.pdf

34

Line-in/Line-out:

Regulatory Change:

Issue Memo from DPAP

SUBJECT: Use of MIL-STD-129

MIL-STD-129 is a requirement related to the marking of units, unit packages, and unit

loads that are being shipped to military facilities and supply centers. The requirement is

currently included in all delivery orders for the General Services Administration’s Multiple

Award Schedules.

FAR 12.301(a) requires that for the acquisition of commercial items, “to the maximum

extent practicable, include only those clauses—…determined to be consistent with customary

commercial practice.” MIL-STD-129 is not a customary commercial practice.

Ordering activities may continue to use MIL-STD-129 for non-commercial items at their

discretion. For the acquisition of commercial items, ordering activities or facilities must receive

prior approval from DPAP in order to use MIL-STD-129. The approval will be last for one year

and apply to commercial items shipped to a specific facility or location.

Requests for approval to use MIL-STD-129 must be sent to _____, and DPAP will

promptly provide a written decision. Requests from ordering activities for the use of MIL-STD-

129 should include:

• A rationale for the use MIL-STD-129

• A list facilities and supply centers that will use MIL-STD-129

DPAP will maintain a list of facilities that have approval to use MIL-STD-129 in the

acquisition of commercial items.

35

Improve FedBizOpps

Current State:

Federal Business Opportunities (“FedBizOpps”) is an online web portal that serves as

the single government point-of-entry for Federal procurement opportunities valued

over $25,000. The platform, which is operated under the authority of the GSA, enables

Federal customers to publicize business opportunities for commercial vendors access

and response.

Recommended Action:

The Coalition recommends that GSA modernize the FedBizOpps portal through

upgrades that enhance its transparency, user interface, and functionality. GSA should

form a working group with representatives from other government agencies and

industry to consider enhancements to the system.

Rationale:

The current FedBizOpps portal lacks many of the features found on comparable

commercial market platforms. For instance, when performing a search on the portal,

upon selecting a search query, if a user wishes to return to the main search results, they

are required to “reload” the webpage, effectively rendering the “back” button function

useless. Without critical modernization upgrades to the portal, these design flaws limit

transparency and competition, decrease effectiveness for the user, and increase delay,

all of which translates into higher prices paid by Federal customers, and ultimately, the

American taxpayer.

Line-in/Line-out:

None required, GSA already has the authority to manage the FedBizOpps.

36

Identifying and Measuring Key Performance Indicators for Contract Personnel, Program Managers, and Organizations Current State:

Members are concerned that the procurement process has become bogged down by

process-focused requirements, which has led to a risk-averse culture. The ultimate

purpose of the acquisition system is to support the mission requirements of Federal

agencies, while finding the best value for the American taxpayer.

Recommendation:

OFPP should issue guidance on the development of effective Key Performance

Indicators (KPI) for the acquisition workforce. Agencies should utilize KPIs for contract

personnel that reward innovation, mission fulfillment, and attention to total cost of

acquisition through indicators such as market research, extent of communications with

industry, competition, and the appropriate use of commercial items and practices. A

similar effort should be undertaken at the agency level in connection with success in

meeting procurement goals.

Rationale:

The professionalism expected of contract and program managers cannot thrive in a risk-

averse environment, as the government relies on these individuals to exercise

discretion, which always involves an element of risk. Thus, for the government to

expand opportunities for professionals to exercise discretion, in addition to balancing

the levels of discretion against technical and program experience, it needs to recast the

work environment to accept rational risk-taking. In this regard, critical professional

behaviors expected of those exercising discretion should be manifested in the KPIs that

are realistic, understandable, and meaningful, against which, those professionals will be

evaluated. In addition, these KPIs should be aligned to the extent practicable to reward

mission fulfillment. Likewise, indicators need to be established and followed by the

organizations in which these professionals perform to assure that these organizations

create the culture necessary to support contract and programs

Line-in/Line-out:

None required, OFPP has the authority to implement the recommendations.

37

Improving Performance-Based Acquisition

Current State:

Performance Based Acquisition (PBA) is an approach to acquisition that focuses on

describing end results (rather than dictating the manner in which the contracted work is

to be done) and measuring and compensating vendors on the basis of whether or not

those results were obtained. Additionally, FAR 37 requires, “the use of performance-

based acquisitions for services to the maximum extent practicable.” The oversight

community, in particular the Government Accountability Office, has found that

agencies are not following PBA regulations consistently. The Defense Acquisition

University (DAU) offers one course in Performance-Based Logistics, but it does not

currently offer courses dedicated to PBA.

Recommendations:

Create a PBA training course in the DAU. Additionally, create a certification or training

track that encourages the acquisition workforce to expand its PBA skill set.

OFPP can develop Key Performance Indicators (KPIs) around PBA, which can be used

to help drive cultural changes.

Rationale:

If PBA were used the maximum extent practicable, there would a significant change in

government procurements, shifting the focus from process to outcomes. Additionally,

improving the acquisition workforce’s use of PBA could lead to lower costs for the

American taxpayer.

Line-in/Line-Out:

None required, DoD and OFPP have the authority to implement the changes.

38

The GSA Multiple Award Schedules

The Coalition has prepared a number of recommendations for the improvement of the

GSA Multiple Award Schedule (MAS). Although the program is not managed by DoD,

the Department is the largest user of MAS, and improvements in Schedules will provide

benefits to DoD customers.

The Schedules provide significant benefits for DoD customers, including:

• Continuous open season which ensure access to innovative products/services

and companies

• Access to more than 10,000 qualified contractors

• The ability to meet small business goals – DoD regularly procures more than 10

percent of all its small business purchases on the Schedules

• Streamlined ordering procedures

The Administration has also recognized the opportunities that the Schedules can

provide to buyers. OMB Memoranda M-17-22 established that the government should

utilize pre-existing contracts, including the Schedules in order to avoid redundant

contract actions.

39

Price Reductions Clause – Multiple Award Schedule Current State:

The Price Reductions Clause (PRC) requires that contractors establish a basis of award

customer (or group of customers) and maintain a discount relationship with the basis of

award throughout the life of the contract. Originally intended as method to ensure fair

and reasonable pricing throughout the life of the contract, the PRC provides little

practical utility to the government and represents an immense burden for industry

costing millions of dollars each year.

Recommended Action:

Eliminate the PRC.

Rationale:

For years, the Coalition has argued that the PRC no longer has any practical utility.

Price reductions are driven by competitive forces, not the PRC. In fact, GSA has

determined that only 3 percent of price reductions were driven by the PRC; the vast

majority of reductions were caused by market forces. While the government receives

little practical utility from the PRC, industry is faced with an immense tracking burden

that costs millions of dollars each year. Finally, no other commercial item contract

requires the PRC.

For more information from the Coalition on why the PRC is no longer necessary, please

see:

• Burden of the Price Reductions Clause- Submission 1 (2/27/12)

• Burden of the Price Reductions Clause- Submission 2 (4/16/12)

• Letter to Houston Taylor, Assistant Commissioner, Office of Acquisition Management on Price Reductions Clause Waiver (4/3/13)

• GSA Multiple Award Schedule Pricing: Recommendations to Embrace Regulatory and Commercial Market Changes (9/9/13)

• Coalition Letter to GSA on a Price Reductions Clause Waiver (8/1/14)

• Transactional Data Proposed Rule Comments (5/2/2015)

• FSS Pricing Disclosure Comments (1/19/16)

• Comments on FSS Pricing Disclosures #2 (5/11/16)

40

Line-in/Line-out:

GSAM Change:

Subpart 552.2—Text of Provisions and Clauses

552.238-75 Price Reductions.

As prescribed in 538.273(b)(2), insert the following clause:

Price Reductions (Jul 2016)

(a) Before award of a contract, the Contracting Officer and the Offeror will agree upon

(1) the customer (or category of customers) which will be the basis of award, and (2) the

Government’s price or discount relationship to the identified customer (or category of

customers). This relationship shall be maintained throughout the contract period. Any

change in the Contractor’s commercial pricing or discount arrangement applicable to

the identified customer (or category of customers) which disturbs this relationship shall

constitute a price reduction.

(b) During the contract period, the Contractor shall report to the Contracting Officer all

price reductions to the customer (or category of customers) that was the basis of award.

The Contractor’s report shall include an explanation of the conditions under which the

reductions were made.

(c)

(1) A price reduction shall apply to purchases under this contract if, after the date

negotiations conclude, the Contractor—

(i) Revises the commercial catalog, pricelist, schedule or other document

upon which contract award was predicated to reduce prices;

(ii) Grants more favorable discounts or terms and conditions than those

contained in the commercial catalog, pricelist, schedule or other

documents upon which contract award was predicated; or

(iii) Grants special discounts to the customer (or category of customers)

that formed the basis of award, and the change disturbs the

price/discount relationship of the Government to the customer (or

category of customers) that was the basis of award.

(2) The Contractor shall offer the price reduction to the eligible ordering activity

with the same effective date, and for the same time period, as extended to the

commercial customer (or category of customers).

41

(d) There shall be no price reduction for sales—

(1) To commercial customers under firm, fixed-price definite quantity contracts

with specified delivery in excess of the maximum order threshold specified in

this contract;

(2) To Federal agencies;

(3) Made to Eligible Ordering Activities identified in GSAR Clause 552.238-

78 when the order is placed under this contract (and the Eligible Ordering

Activities identified in GSAR Clause 552.238-78 is the agreed upon customer or

category of customer that is the basis of award); or

(4) Caused by an error in quotation or billing, provided adequate documentation

is furnished by the Contractor to the Contracting Officer.

(a)(e) The Contractor may offer the Contracting Officer a voluntary Governmentwide

price reduction at any time during the contract period.

(b)(f) The Contractor shall notify the Contracting Officer of any price reduction subject

to this clause as soon as possible, but not later than 15 calendar days after its effective

date.

(c)(g) The contract will be modified to reflect any price reduction which becomes

applicable in accordance with this clause.

(End of clause)

42

Transactional Data Reporting – GSA Multiple Award Schedule Current State:

The final Transactional Data Reporting (TDR) rule, which was issued on June 23, 2016,

requires Schedule contract holders to report eleven transactional data elements to GSA

on a monthly basis. To compensate for its additional contractor burden, the rule

eliminates the Commercial Sales Practice disclosures and the Price Reduction Clause.

The Coalition has maintained that the rule is unnecessary, burdensome, and costly. The

data has limited value to the government, because it is collected without understanding

the underlying terms and conditions of the order is incomplete and could lead to

confusion among contracting officers. Further, by implementing non-commercial

practices, the rule limits access to innovative solutions in the Federal marketplace.

Recommended Action:

The TDR clause should be deleted.

Rationale:

In particular, the final rule implements unnecessary, costly, and burdensome

requirements on contractors for the submission of data that is already in the possession

of the government. Consequently, Federal customers are likely to see decreased access

to innovative solutions.

43

Line-in/Line-out:

GSAM Change:

Subpart 552.2—Text of Provisions and Clauses

552.238-74 Industrial Funding Fee and Sales Reporting.

****

Alternate I (Jun 2016). As prescribed in 538.273(b)(1), substitute the following

paragraphs (a), (b), (c), and (d) for paragraphs (a), (b), (c), and (d) of the basic clause:

(a) Definition. “Transactional data” encompasses the historical details of the

products or services delivered by the Contractor during the performance of task or

delivery orders issued against this contract.

(b) Reporting of Transactional Data. The Contractor must report all transactional

data under this contract as follows:

(1) The Contractor must electronically report transactional data by

utilizing the automated reporting system at an Internet website designated by

the General Services Administration (GSA) or by uploading the data according to

GSA instructions. GSA will post registration instructions and reporting

procedures on the Vendor Support Center website, https://vsc.gsa.gov. The

reporting system website address, as well as registration instructions and

reporting procedures, will be provided at the time of award or inclusion of this

clause in the contract.

(2) The Contractor must provide, at no additional cost to the Government,

the following transactional data elements, as applicable:

(i) Contract or Blanket Purchase Agreement (BPA) Number.

(ii) Delivery/Task Order Number/Procurement Instrument Identifier

(PIID).

(iii) Non Federal Entity.

(iv) Description of Deliverable.

(v) Manufacturer Name.

(vi) Manufacturer Part Number.

(vii) Unit Measure (each, hour, case, lot).

(viii) Quantity of Item Sold.

(ix) Universal Product Code.

(x) Price Paid per Unit.

(xi) Total Price.

Note to paragraph (b)(2): The Contracting Officer may add data elements to the

standard elements listed in paragraph (b)(2) of this section with the approvals listed in

GSAM .

44

(3) The contractor must report transactional data within 30 calendar days

from the last calendar day of the month. If there was no contract activity during

the month, the Contractor must submit a confirmation of no reportable

transactional data within 30 calendar days of the last calendar day of the month.

(4) The Contractor must report the price paid per unit, total price, or any

other data elements with an associated monetary value listed in (b)(2) of this

section, in U.S. dollars.

(5) The reported price paid per unit and total price must include the

Industrial Funding Fee (IFF).

(6) The Contractor must maintain a consistent accounting method of

transactional data reporting, based on the Contractor's established commercial

accounting practice.

(7) Reporting Points.

(i) The acceptable points at which transactional data may be

reported include–

(A) Issuance of an invoice; or

(B) Receipt of payment.

(ii) The Contractor must determine whether to report transactional

data on the basis of invoices issued or payments received.

(8) The Contractor must continue to furnish reports, including

confirmation of no transactional data, through physical completion of the last

outstanding task or delivery order of the contract.

(9) Unless otherwise expressly stated by the ordering activity, orders that

contain classified information or other or information that would compromise

national security are exempt from this reporting requirement.

(10) This clause does not exempt the Contractor from fulfilling existing

reporting requirements contained elsewhere in the contract.

(11) GSA reserves the unilateral right to change reporting instructions

following 60 calendar days' advance notification to the Contractor.

(c) Industrial Funding Fee (IFF).

(1) This contract includes an IFF charged on orders placed against this

contract. The IFF is paid by the authorized ordering activity but remitted to GSA

by the Contractor. The IFF reimburses GSA for the costs of operating the Federal

Supply Schedule program, as set forth in 40 U.S.C. 321: Acquisition Services

Fund. Net operating revenues generated by the IFF are also applied to fund

initiatives benefitting other authorized GSA programs, in accordance with 40

U.S.C. 321.

(2) GSA has the unilateral right to change the fee amount at any time, but

not more than once per year; GSA will provide reasonable notice prior to the

45

effective date of any change. GSA will post notice of the current IFF on the

Vendor Support Center website at https://vsc.gsa.gov.

(3) Offerors must include the IFF in their prices. The fee is included in the

awarded price(s) and reflected in the total amount charged to ordering activities.

The fee will not be included in the price of non-contract items purchased

pursuant to a separate contracting authority, such as a Governmentwide

Acquisition Contract (GWAC); a separately awarded Federal Acquisition

Regulation (FAR) Part 12, FAR Part 13, FAR Part 14, or FAR Part 15 procurement;

or a non-FAR contract.

(4) The Contractor must remit the IFF to GSA in U.S. dollars within 30

calendar days after the last calendar day of the reporting quarter; final payment

must be remitted within 30 calendar days after physical completion of the last

outstanding task order or delivery order issued against the contract.

(5) GSA reserves the unilateral right to change remittance instructions

following 60 calendar days’ advance notification to the Contractor.

(d) The Contractor’s failure to remit the full amount of the IFF within 30 calendar

days after the end of the applicable reporting period constitutes a contract debt to the

United States Government under the terms of FAR Subpart 32.6. The Government may

exercise all rights under the Debt Collection Improvement Act of 1996, including

withholding or offsetting payments and interest on the debt (see FAR clause 52.232-17,

Interest). If the Contractor fails to submit the required transactional data reports,

falsifies them, or fails to timely pay the IFF, these reasons constitute sufficient cause for

the Government to terminate the contract for cause.

Subpart 538.2 Establishing and Administering Federal Supply Schedules

538.273 Contract Clauses

****

(b) Multiple and single award schedules. Insert the following in solicitations and contracts:

(1) 552.238-74, Industrial Funding Fee and Sales Reporting. Use Alternate I for

Federal Supply Schedules with Transactional Data Reporting requirements. Clause

552.238-75 Alternate I should also be used when vendors agree to include clause

552.238-74 Alternate I in the contract.

(2) 552.238-75, Price Reductions. Use Alternate II for Federal Supply Schedules

with Transactional Data Reporting requirements. This alternate clause is used when

vendors agree to include clause 552.238-74 Alternate I in the contract.

(3) 552.238-81, Modifications (Federal Supply Schedule).

(i) Use Alternate I for Federal Supply Schedules that only accept electronic

modifications.

46

(ii) Use Alternate II for Federal Supply Schedules with Transactional Data

Reporting requirements. This alternate clause is used when vendors agree to

include clause 552.238-74 Alternate I in the contract.

47

Duplicative Special Item Numbers Current State:

Currently, MAS is divided into schedules that correspond to a product or service, and

each schedule is sub-divided into Special Item Numbers (SIN). Recently, a trend has

emerged that GSA will create a new SIN in order to market a specific set of products or

services to agency buyers. Examples of this trend include the Health IT SIN, the Highly

Adaptive Cyber Security SINs, the Earth Observation SIN, and a proposed Continuous

Diagnostics and Mitigation SIN, all on Schedule 70.

Recommended Action:

Require a business case analysis before any new SINs are created.

Rationale:

Industry understands that there are reasons to add new SINs, but the recent practice

associated with adding new SINs has generated concern. The Coalition’s members

believe that, before new SINs are added, GSA should complete a thorough business

case justifying the addition, including data manifesting the firm commitments received

from agency buyers to use the new SINs. GSA should look at the model set by the

Alliant GWAC, which does not subdivide the contract into functional areas or line

items. That contract is used to acquire health IT, even without a specific health IT

category.

For more information from the Coalition on the process of adding new SINs, please see:

• Coalition Health IT SIN Comments (2/8/16)

• Coalition Response to GSA IT Schedule 70 Highly Adaptive Cybersecurity Services (HACS) SIN RFI (6/21/16)

• Coalition Comments on GSA Proposed Continuous Diagnostics and Mitigation (CDM) SIN (5/1/17)

48

Line-in/Line-out:

FAR Change:

Subpart 38.2—Establishing and Administering Federal Supply Schedules

38.201 Coordination requirements.

(a) Subject to interagency agreements, contracting officers having responsibility for

awarding Federal Supply Schedule contracts shall coordinate and obtain approval of

the General Services Administration’s Federal Supply Service (FSS) before—

(1) Establishing new schedules;

(2) Discontinuing existing schedules;

(3) Changing the scope of agency or geographical coverage of existing schedules; or

(4) Adding or deleting special item numbers, national stock numbers, or revising

their description.

(b) Requests should be forwarded to the:

General Services Administration

Federal Supply Service

Office of Acquisition (FC)

Washington, DC 20406.

38.202 Establishing New Special Item Numbers

(a) Before adding a new special item number to the Federal Supply Schedule, the

General Services Administration’s Federal Acquisition Service shall produce and make

available to the public a business case analysis for the new special item number, which

shall include the following—

(1) A rationale for the new special item number, including why an existing

special item number does not contain the scope of the products or services;

(2) Data demonstrating firm agency commitments to use the new special item

number; and

(3) A marketing plan for the new special item number.

49

Develop Alternative Methods for Pricing GSA Schedule Contracts.

Current State:

Pursuant to General Services Administration Acquisition Regulation (“GSAR”) 515.408,

vendors are required to provide a year of historical data on commercial sales for all

products and services in order to include them on their Multiple Award Contract

(“MAS”). This Commercial Sales Practices (CSP) information is used to determine

whether offered prices are fair and reasonable. Disclosure is required regardless of

dollar value or terms and conditions. In addition, offerors are required to submit

standard commercial sales and discounting practices, as well as exceptions to those

practices.

Recommended Action:

The Coalition recommends that GSA pilot a “Comprehensive, Competitive Services

Schedule (CCSS)” for IT and Professional Services. Under the CCSS, GSA and offerors

would negotiate basic agreements establishing key terms and conditions (e.g. Industrial

Funding Fee, Commercial Supplier Agreement, small business subcontracting plans,

and other applicable commercial and/or government-unique terms) that would govern

at the subsequent task order competition. GSA would post ceiling rates for labor

categories on GSA Advantage. Pricing would ultimately occur based on competition at

the task order level in response to known requirements. Contractors would be exempt

from the PRC, CSP, and transactional data reporting. The CCSS would also authorize

the use of Other Direct Costs or Order Level Materials.2

Rationale:

The CSP format causes significant burdens for vendors, both in terms of time spent on

compliance activities, and the costs associated with those activities. These costs are

inevitably passed on to customer agencies in the form of higher pricing for services and

products offered under the GSA’s and the VA’s MAS programs. Other less

burdensome, more market driven solutions can be used to negotiate MAS task and

delivery order prices. Moreover, market driven solutions provide more rapid Federal

government access to cutting-edge, innovative technologies, and solutions.

2 See: Coalition Comments on GSA Acquisition Reform

50

Line-in/Line-out:

515.408 Solicitation provisions and contract clauses.

MAS Request for Information Other than Cost or Pricing Data

(a) Use Alternate IV of the FAR provision at 52.215-20, Requirements for Cost or Pricing

Data or Information Other Than Cost or Pricing Data, for MAS solicitations to provide

the format for submission of information other than cost or pricing data for MAS

solicitations. To provide uniformity in requests under the MAS program, you should

insert the following in paragraph (b) of the provision:

(1) An offer prepared and submitted in accordance with the clause at 552.212-70,

Preparation of Offer (Multiple Award Schedule).

(2) Commercial sales practices. When the solicitation contains the basic clause

552.238-74 Industrial Funding Fee and Sales Reporting, the Offeror must submit

information in the format provided in this solicitation in accordance with the

instructions at Figure 515.4-2 of the GSA Acquisition Regulation (48 CFR 515.4-

2), or submit information in the Offeror's own format. The offeror does not

submit information if the solicitation contains 552.216-77.

(b) When the contract contains the basic clause 552.238-74 Industrial Funding Fee and

Sales Reporting, insert the following format for commercial sales practices in the

exhibits or attachments section of the solicitation and resulting contract (see FAR

12.303). Do not insert the format for the commercial sales practices if the solicitation

contains 552.216-77.

****

(c) When the contract contains the basic clause 552.238-74 Industrial Funding Fee and

Sales Reporting, include the instructions for completing the commercial sales practices

format in Figure 515.4-2 in solicitations issued under the MAS program. Do not include

the instructions for the commercial sales practices if the solicitation contains 552.216-77.

****

(d) When the contract contains the basic clause 552.238-74 Industrial Funding Fee and

Sales Reporting, insert the clause at 552.215-72, Price Adjustment-Failure to Provide

51

Accurate Information, in solicitations and contracts under the MAS program. Do not

insert the clause if the solicitation contains 552.216-77.

538.270-3 Evaluation of offers on the Comprehensive Competitive Services Schedule

(a) Applicability. Utilize this evaluation methodology for negotiating MAS offers on the

Comprehensive Competitive Services Schedule (see 552.216-77).

(b) Contracting Officers shall utilize the techniques in FAR 15.404 when evaluating

pricing for MAS offers.

(1) The Contracting Officer shall perform market research to compare prices for the

same or similar items in accordance with FAR 15.404-1(b)(2)(vi).

538.272 MAS price reductions.

(a) Applicability. This section applies when the contract contains the basic clause 552.238-

74 Industrial Funding Fee and Sales Reporting. This section does not apply if the

solicitation contains 552.216-77.

(b) The basic clause and Alternate I of 552.238-75, Price Reductions, requires the

contractor to maintain during the contract period the negotiated price/discount

relationship (and/or term and condition relationship) between the eligible ordering

activities and the offeror’s customer or category of customers on which the contract

award was predicated (see 538.271(c) ). If a change occurs in the contractor’s

commercial pricing or discount arrangement applicable to the identified commercial

customer (or category of customers) that results in a less advantageous relationship

between the eligible ordering activities and this customer or category of customers, the

change constitutes a “price reduction.”

(c) Ensure that the contractor understands the requirements of section 552.238-75 and

agrees to report all price reductions to the Contracting Officer as provided for in the

clause.

538.273 Contract clauses.

****

(b) Multiple and single award schedules. Insert the following in solicitations and

contracts

****

52

(2) 552.238-75, Price Reductions. Use Alternate II for Federal Supply Schedules with

Transactional Data Reporting requirements or Competitive, Comprehensive Services

Schedules 552.216-77. This alternate clause is used when vendors agree to include

clause 552.238-74 Alternate I in the contract.

(3) 552.28-81, Modifications (Federal Supply Schedule).

(i) Use Alternate I for Federal Supply Schedules that only accept electronic

modifications.

(ii) Use Alternate II for Federal Supply Schedules with Transactional Data

Reporting requirements or Competitive, Comprehensive Services Schedules

552.216-77. This alternate clause is used when vendors agree to include

clause 552.238-74Alternate I in the contract.

(4) Insert clause 552.216-77 in solicitations for Federal Supply Schedule contracts

which have been designated as Comprehensive, Competitive Services Schedule.

****

GSAM 552.216-77 Comprehensive Competitive Services Schedule

As prescribed in 516.506(f), insert the following provisions:

Comprehensive, Competitive Services Schedule (DATE)

(a) Definition. “Comprehensive Competitive Services Schedule” a Federal Supply

Schedule under which pricing is determined by competition on task orders.

(b) Under the Comprehensive Competitive Services Schedules, a contractor is exempt

from the Price Reductions Clause, Transactional Data Reporting, and the Commercial

Sales Practice Format.

(c) The contractor will negotiate ceiling rates for labor categories with the Government,

which will be posted to GSA Advantage!.

53

Implement OLM Current State:

In September 2016, the GSA published a proposed rule that would add the capability to

utilize Order Level Materials (OLM)3 to the Schedules program. The current lack of

OLM’s on the Schedules makes it more difficult to procure total solutions. In addition,

Coalition members have reported that the lack of ODC’s forces agencies to use other

vehicles. Significantly, the FAR already authorizes the inclusion of ODC’s in

commercial item contracts.

Recommended Action:

The Coalition recommends that GSA move forward with the proposed rule with the

following modifications:

• Remove requirement for contractors to submit three quotes for price

reasonableness because it is a burdensome, non-commercial practice.

• Remove requirements for contractors to report OLM’s through a separate SIN.

This process is burdensome, comes at a high cost to contractors, and does not

yield meaningful data for GSA.

• Empower agencies with the discretionary authority to allow for indirect costs at

the order level.

• Authorize OLM’s to exceed 33 percent of the value of the order.

Rationale:

This approach would enhance the quality of the Schedules program by increasing the

ability for customers to procure total solutions in the least burdensome manner. In

addition, it will empower Federal customers to realize lower Total Acquisition Costs.

3 Also known as Other Direct Costs or “ODC’s”

54

Line-in/Line-out:

GSAM Change:

Insert the following

Part 515—Contracting by Negotiation

515.408 Solicitation Provisions and Contract Clauses

****

(c) Offerors are not required to complete the commercial sales practices disclosure for order-level

materials (See subpart 538.71).

Part 538—Federal Supply Schedule Contracting

538.71—Order-Level Materials

538.7100 Definitions.

Order-level materials means supplies and/or services acquired in direct support of an individual

task or delivery order placed against a Federal Supply Schedule (FSS) contract, when the

supplies and/or services are not known at the time of Schedule contract award. The prices of

order-level materials are not established in the FSS contract. Order-level materials are not open

market items discussed in FAR 8.402(f).

538.7101 Applicability.

Order-level materials are authorized under all of the Federal Supply Schedule contracts

538.7103 Contract Clauses.

(a) Use FAR clause 52.212-4 Alternate I in all Federal Supply Schedules authorized for the

acquisition of order-level materials (see 538.7101). Use the following language for the clause fill-

in:

(1) Insert “Each order must list separately subcontracts for services excluded from the

FSS Hourly.

(2) Insert “Each order must list separately the elements of other direct charge(s) for that

order” in (i)(1)(ii)(D)(1).

55

(b) Use 552.238-XX, Special Ordering Procedures for the Acquisition of Order-Level Materials

in all Federal Supply Schedules authorized for the acquisition of order-level materials (see

538.7101).

Part 552—Solicitation Provisions and Contract Clauses

552.238-XX Special Ordering Procedures for the Acquisition of Order-Level Materials.

As prescribed in 538.7103(b), insert the following clause:

Special Ordering Procedures for the Acquisition of Order-Level Materials (DATE)

(a) Order-level materials means supplies and/or services acquired in direct support of an

individual task or delivery order placed against a Federal Supply Schedule (FSS) contract

or FSS BPA, when the supplies and/or services are not known at the time of Schedule

contract award. The prices of order-level materials are not established in the FSS

contract. Order-level materials that are acquired following the procedures in paragraph

(d) of this clause are not open market items discussed in FAR 8.402(f).

(b) FAR 8.403(b) provides that GSA may establish special ordering procedures for a

particular FSS or for some Special Item Numbers (SINs) within a Schedule.

(c) The procedures in FAR Subpart 8.4 apply to this contract, with the exceptions listed in

this clause. If a requirement in this clause is inconsistent with FAR Subpart 8.4, this

clause takes precedence.

(d) Procedures for including order-level materials when placing an individual task or

delivery order against an FSS contract or FSS Blanket Purchase Agreement (BPA).

(1) The procedures discussed in FAR 8.402(f) do not apply when placing task and

delivery orders for order-level materials.

(2) Order-level materials are included in the definition of the term “materials” in

GSAR clause 552.212-4 Alternate I, and therefore all provisions of clause

552.212-4 Alternate I that apply to “materials” also apply to order-level

materials. The ordering activity shall follow procedures under the Federal Travel

Regulation and FAR Part 31 when order-level materials include travel.

(3) Order-level materials shall only be acquired in direct support of an order and not

as the primary basis.

(4) Prior to the placement of an order that includes order-level materials, the ordering

activity shall follow procedures in FAR 8.404(h).

(5) In accordance with GSAR clause 552.215-71 Examination of Records by GSA,

GSA has the authority to examine the contractor's records for compliance with

56

the pricing provisions in FAR clause 52.212-4 Alternate I, to include

examination of any books, documents, papers, and records involving transactions

related to the contract for overbillings, billing errors, and compliance with the IFF

and the Sales Reporting clauses of the contract.

(6) Order-level materials are exempt from the following clauses:

i. 552.216-70 Economic Price Adjustment—FSS Multiple Award Schedule

Contracts.

ii. 552.238-71 Submission and Distribution of Authorized FSS Schedule

Pricelists.

iii. 552.238-75 Price Reductions.

(End of Clause)

57

The Commercial Supplier Agreement

Current State:

In May 2016, GSA issued a proposed rule that intends to streamline the end-user license

agreement reviews and contract negotiations processes by ensuring that certain contract

language defers to Federal law where there is a conflict with commercial terms.

Specifically, the proposed rule adopts a modified “order of precedence,” which

contradicts both law and regulation, and which creates a preference for government

terms and conditions.

Recommended Action:

The Coalition recommends that GSA reverse the change in the order of precedence and

return to the FAR clause language that existed prior to the July 2015 class deviation.

Rationale:

As written, the proposed changes to the GSAR would have far-reaching, unintended

negative impacts on the availability of commercial products and services to Federal

agencies. The increased burdens add risk and decreases government and contractor

incentive to bring innovative solutions to the Federal marketplace.

See:

• FAR & Beyond Blog o September 3, 2015 o March 4, 2016

• Coalition Comments on Class Deviation

• Coalition Response to Class Deviation

• Coalition Comments on Proposed Rule

58

Line-in/Line-out:

GSAM Change:

Insert the following

Part 502—Definitions of Words and Terms

502.1—Definitions

502.101 Definitions

Commercial supplier agreements means terms and conditions customarily offered to the public

by vendors of supplies or services that meet the definition of “commercial item” set forth in FAR

2.101 and intended to create a binding legal obligation on the end user. Commercial supplier

agreements are particularly common in information technology acquisitions, including

acquisitions of commercial computer software and commercial technical data, but they may apply

to any supply or service. The term applies—

(1) Regardless of the format or style of the document. For example, a commercial supplier

agreement may be styled as standard terms of sale or lease, Terms of Service (TOS), End

User License Agreement (EULA), or another similar legal instrument or agreement, and

may be presented as part of a proposal or quotation responding to a solicitation for a

contract or order;

(2) Regardless of the media or delivery mechanism used. For example, a commercial supplier

agreement may be presented as one or more paper documents or may appear on a

computer or other electronic device screen during a purchase, software installation, other

product delivery, registration for a service, or another transaction

Part 512—Acquisition of Commercial Items

512.2—Special Requirements for the Acquisition of Commercial Items

512.216 Unenforceability of unauthorized obligations.

GSA has a deviation to FAR 12.216 for this section to read as follows:

For commercial contracts, supplier license agreements are referred to as commercial

supplier agreements (defined in 502.101). Paragraph (u) of clause 552.212-4 prevents

violations of the Anti-Deficiency Act (31 U.S.C. 1341) for supplies or services acquired

subject to a commercial supplier agreement.

512.301 Solicitation provisions and contract clauses for the acquisition of commercial items.

59

****

(e) GSA has a deviation to revise certain paragraphs of FAR clause 52.212-4. Use clause

552.212-4 Contract Terms and Conditions—Commercial Items (FAR DEVIATION), for

acquisitions of commercial items in lieu of FAR 52.212-4. The contracting officer may

tailor this clause in accordance with FAR 12.302 and GSAM 512.302.

Part 513—Simplified Acquisition Procedures

513.2—Actions At or Below the Micro-Purchase Threshold

513.202 Unenforceability of unauthorized obligations

Clause 552.232-39, Unenforceability of Unauthorized Obligations (FAR DEVIATION),

will automatically apply to any micro-purchase in lieu of FAR 52.232-39 for supplies and

services acquired subject to a commercial supplier agreement (as defined in 502.101). in

micro-purchases.

513.3—Simplified Acquisition methods

513.302-5 Clauses

Where the supplies or services are offered under a commercial supplier agreement (as

defined in 502.101), the purchase order or modification shall incorporate clause 552.232-

39, Unenforceability of Unauthorized Obligations (FAR DEVIATION), in lieu of FAR

52.232-39, and clause 552.232-78, Commercial Supplier Agreements-Unenforceable

Clauses.

Part 532—Contract Financing

532.7—Contract Funding

532.705 Unenforceability of unauthorized obligations

Supplier license agreements defined in FAR 32.705 are equivalent to commercial supplier

agreements defined in 502.101.

532.706-3 Clause for unenforceability of unauthorized obligations

(a) The contracting officer shall utilize the clause at 552.232-39, Unenforceability of

Unauthorized Obligations (FAR DEVIATION) in all solicitations and contracts in lieu

of FAR 52.232-39.

60

(b) The contracting officer shall utilize the clause at 552.232-78, Commercial Supplier

Agreements—Unenforceable Clauses, in all solicitations and contracts (including orders)

when not using FAR part 12.

Part 552—Solicitation Provisions and Contract Clauses

552.212-4 Contract Terms and Conditions—Commercial Items (FAR DEVIATION)

As prescribed in 512.301(e), replace paragraphs (g)(2) and (u) of FAR clause 52.212-4. Also, add

paragraph (w) to FAR clause 52.212-4.

Contract Terms and Conditions—Commercial Items (FAR DEVIATION) (Date)

(g)(2) The due date for making invoice payments by the designated payment office is the later of

the following two events:

(i) The 10th day after the designated billing office receives a proper invoice from the

Contractor. If the designated billing office fails to annotate the invoice with the date of

receipt at the time of receipt, the invoice payment due date shall be the 10th day after the

date of the Contractor's invoice; provided the Contractor submitted a proper invoice and

no disagreement exists over quantity, quality, or Contractor compliance with contract

requirements.

(ii) The 10th day after Government acceptance of supplies delivered or services performed

by the Contractor.

(u) Unauthorized Obligations.

(1) Except as stated in paragraph (u)(2) of this clause, when any supply or service

acquired under this contract is subject to any commercial supplier agreement (as defined

in 502.101) that includes any language, provision, or clause requiring the Government to

pay any future fees, penalties, interest, legal costs or to indemnify the Contractor or any

person or entity for damages, costs, fees, or any other loss or liability that would create an

Anti-Deficiency Act violation (31 U.S.C. 1341), the following shall govern:

(i) Any such language, provision, or clause is unenforceable against the Government.

(ii) Neither the Government nor any Government authorized end user shall be

deemed to have agreed to such clause by virtue of it appearing in the commercial

supplier agreement. If the commercial supplier agreement is invoked through an “I

agree” click box or other comparable mechanism (e.g., “click-wrap” or “browse-wrap”

agreements), execution does not bind the Government or any Government authorized

end user to such clause.

(iii) Any such language, provision, or clause is deemed to be stricken from the

commercial supplier agreement.

61

(2) Paragraph (u)(1) of this clause does not apply to indemnification or any other

payment by the Government that is expressly authorized by statute and specifically

authorized under applicable agency regulations and procedures.

(w) Commercial supplier agreements—unenforceable clauses. When any supply or service

acquired under this contract is subject to a commercial supplier agreement (as defined in

502.101), the following language shall be deemed incorporated into the commercial supplier

agreement. As used herein, “this agreement” means the commercial supplier agreement:

(1) Notwithstanding any other provision of this agreement, when the end user is an

agency or instrumentality of the U.S. Government, the following shall apply:

(i) Applicability. This agreement is a part of a contract between the commercial

supplier and the U.S. Government for the acquisition of the supply or service that

necessitates a license (including all contracts, task orders, and delivery orders under

FAR Part 12).

(ii) End user. This agreement shall bind the ordering activity as end user but shall

not operate to bind a Government employee or person acting on behalf of the

Government in his or her personal capacity.

(iii) Law and disputes. This agreement is governed by Federal law.

(A) Any language purporting to subject the U.S. Government to the laws of a

U.S. state, U.S. territory, district, or municipality, or a foreign nation, except

where Federal law expressly provides for the application of such laws, is hereby

deleted.

(B) Any language requiring dispute resolution in a specific forum or venue that is

different from that prescribed by applicable Federal law is hereby deleted.

(C) Any language prescribing a different time period for bringing an action than

that prescribed by applicable Federal law in relation to a dispute is hereby deleted.

(iv) Continued performance. The supplier or licensor shall not unilaterally revoke,

terminate or suspend any rights granted to the Government except as allowed by this

contract. If the supplier or licensor believes the ordering activity to be in breach of the

agreement, it shall pursue its rights under the Contract Disputes Act or other

applicable Federal statute while continuing performance as set forth in paragraph (d)

(Disputes).

(v) Arbitration; equitable or injunctive relief. In the event of a claim or dispute

arising under or relating to this agreement, a binding arbitration shall not be used

unless specifically authorized by agency guidance, and equitable or injunctive relief,

including the award of attorney fees, costs or interest, may be awarded against the

U.S. Government only when explicitly provided by statute (e.g., Prompt Payment

Act or Equal Access to Justice Act).

(vi) Additional terms.

(A) This commercial supplier agreement may incorporate additional terms by

reference.

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(B) After award, the contractor may unilaterally revise terms provided:

(1) Terms do not materially change government rights or obligations;

(2) Terms do not increase government prices;

(3) Terms do not decrease overall level of service; and

(4) Terms do not limit any other Government right addressed elsewhere in

this contract.

(vii) No automatic renewals. If any license or service tied to periodic payment is

provided under this agreement (e.g., annual software maintenance or annual lease

term), such license or service shall not renew automatically upon expiration of its

current term without prior express Government approval.

(viii) Indemnification. Any clause of this agreement requiring the commercial

supplier or licensor to defend or indemnify the end user is hereby amended to provide

that the U.S. Department of Justice has the sole right to represent the United States

in any such action, in accordance with 28 U.S.C. 516.

(ix) Audits. Any clause of this agreement permitting the commercial supplier or

licensor to audit the end user's compliance with this agreement is hereby amended as

follows:

(A) Discrepancies found in an audit may result in a charge by the commercial

supplier or licensor to the ordering activity. Any resulting invoice must comply

with the proper invoicing requirements specified in the underlying Government

contract or order.

(B) This charge, if disputed by the ordering activity, will be resolved through the

Disputes clause at 522.212-4(d); no payment obligation shall arise on the part of

the ordering activity until the conclusion of the dispute process.

(C) Any audit requested by the contractor will be performed at the contractor's

expense, without reimbursement by the Government.

(x) Taxes or surcharges. Any taxes or surcharges which the commercial supplier or

licensor seeks to pass along to the Government as end user will be governed by the

terms of the underlying Government contract or order and, in any event, must be

submitted to the Contracting Officer for a determination of applicability prior to

invoicing unless specifically agreed to otherwise in the Government contract.

(xi) Non-assignment. This agreement may not be assigned, nor may any rights or

obligations thereunder be delegated, without the Government's prior approval, except

as expressly permitted under subparagraph (b) of this clause at 552.212-4.

(xii) Confidential information. If this agreement includes a confidentiality clause,

such clause is hereby amended to state that neither the agreement nor the Federal

Supply Schedule price list shall be deemed “confidential information.” Issues

regarding release of “unit pricing” will be resolved consistent with the Freedom of

Information Act. Notwithstanding anything in this agreement to the contrary, the

Government may retain any confidential information as required by law, regulation

or its internal document retention procedures for legal, regulatory or compliance

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purposes; provided, however, that all such retained confidential information will

continue to be subject to the confidentiality obligations of this agreement.

(2) If any language, provision, or clause of this agreement conflicts or is inconsistent

with the preceding paragraph (w)(1), the language, provisions, or clause of paragraph

(w)(1) shall prevail to the extent of such inconsistency.

(End of clause)

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Changes to the Auditing Process

Current State:

The impact of government audits of contracts often extend beyond those of their

commercial market counterparts. This impact can be even more significant where they

are conducted by Inspectors General. The OIG plays a crucial role in detecting waste,

fraud, and abuse, as well as in auditing contracts. This dual role introduces a potential

conflict of interest, as failure to resolve negative findings in a contract audit may

become reasons for programmatic audits. In the cast of GSA, the unintended

consequence of this dual role is that contract audits can be unduly influenced by the

OIG’s program audits and investigative functions. Contracting officers and

management officials may unnecessarily defer to the authority of the OIG, rather than

concentrating on the business decisions. The results are labor-intensive, risk-adverse

processes, often resulting in audits that take unnecessarily long periods to complete.

Delays increase costs and reduce access to innovation in the Federal marketplace.

DOD uses DCAA to conduct its own audits. DOD is, however, a major user of GSA

acquisition program. Consequently, improvement to GSA’s audit process would also

likely reduce cost, and increase effectiveness, of DOD acquisitions.

Recommended Action:

The Coalition recommends that GSA contract audits no longer be conducted by the

Office of the Inspector General.

The decision to use the Inspector General as the audit arm of the contracting officer is

made by internal agency directive. GSA Order 2030.2D ADM P Internal Audit Follow-

up HB and GSA order OIG 5410.2 Office of Inspector General, Audit, Inspection, and

Investigative Activities govern the role of the OIG in GSA contract audits. We

recommend that both directives be modified to delete reference to contract audits.

GSA Schedule contracts included alternative II of 52.212-5, Contract Terms and

Conditions Required to Implement Statutes or Executive Orders—Commercial Items.

Section (d)(1) of that clause, among other things gives an Inspector General appointed

under section 3 or 8G of the Inspector General Act of 1978 (5 U.S.C. App.) the right to—

(i) Examine any of the Contractor’s or any subcontractors’ records that pertain to,

and involve transactions relating to, this contract; and

(ii) Interview any officer or employee regarding such transactions.

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FAR 12.301(b)(4)(ii) prescribes the use of alternate II if “… the acquisition will use funds

appropriated or otherwise made available by the American Recovery and Reinvestment

Act of 2009 (Pub. L. 111-5). This provision is no longer widely needed in GSA

commercial item contracts as Recovery act funds would generally no longer be

applicable to current contracts and orders. We recommend that it no longer be

incorporated in GSA Schedule solicitations and contracts.

Resources for the pricing support and contractor review should be transferred from the

OIG and to the GSA Acquisition services. The Acquisition Services should establish a

new office that would be

• Responsible for assisting contracting officers in price evaluation and negotiations

• Authorized to obtain audit assistance by hiring (FTE) or by contract

In addition, the Coalition recommends that GSA and DOD internal directives should

include a minimum value for contracts to be subject to audits, a set period of time

during which the audit must be completed, and requirements for the annual reporting

of the number auditors and hours worked.

Rationale:

This change would allow for audit processes that address the business needs of the

government and empower contracting officials to exercise pricing discretion afforded

them by the FAR. It also would enhance the ability of the OIG to use their resources to

more effectively investigate cases of suspected fraud waste and abuses.

Further, by implementing a minimum value at which contracts are subject to audits and

setting a firm deadline for audit completion, the government could reduce costs, and

incentivize, innovative suppliers to participate in the Federal marketplace. In addition,

by requiring the reporting of the annual number of auditors and hours worked, the

government could ensure that its auditing activities are cost effective.

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Line-in/Line-out:

Administrative Changes:

Remove FAR 52.212-5 Alternative II from GSA Schedule Contracts. GSA has the authority to

amend its solicitations.

Revise GSA order OIG 5410.2 Office of Inspector General, Audit, Inspection, and

Investigative Activities

GENERAL SERVICES ADMINISTRATION

Washington, DC 20405

OIG 5410.2

DATE

GSA ORDER

SUBJECT: Office of Inspector General, Audit, Inspection, and Investigative Activities

1. Purpose. This update primarily adds the activities of the Office of Inspections but

includes updates to all sections of the policy.

2. Background. This policy sets for the activities of the various components of the

Office of Inspector General.

3. Applicability. All GSA and GSA/OIG employees.

4. Cancellation. OAD P 5410.1, Chapter 9, is cancelled.

5. Signature.

___________________________

Inspector General

OFFICE OF INSPECTOR GENERAL, AUDIT, INSPECTION, AND

INVESTIGATIVE ACTIVITIES

Part 1. Office of Inspector General Activities

1. Audits, inspections, and investigations. The Office of Inspector General (OIG)

conducts independent and objective reviews of GSA programs and activities. The OIG

pursues a two-fold mission in performing audit, inspection, and investigative activities:

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improving the economy, efficiency, and effectiveness of GSA programs; and detecting

and preventing fraud, waste, and mismanagement. Reviews are performed by OIG

employees with posts of duty in regional and Headquarters locations. Audit,

inspection, and investigative activities are discussed in parts 2, 3, and 4.

2. Review of legislation and regulations. New and proposed legislation and

regulations, concerning the programs and activities of GSA are reviewed by the OIG

regarding their impact on economy and efficiency, and fraud prevention and

detection. The review of legislation is performed by the Counsel to the Inspector

General, while the review of regulations and directives is carried out by the OIG

Clearance officer.

3. Allegations of wrongdoing. The OIG receives allegations and complaints about GSA

operations nationwide. Suspected fraud, waste, and mismanagement can be reported

to any Special Agent in Charge, or by contacting the OIG Hotline Officer in

Washington, DC on 202-501-1780, toll free on 800-424-5210, or through the mail

(GSA/OIG/Hotline, Washington, DC 20405). Potentially illegal or improper activities

can be reported confidentially, where the identity of the person is not disclosed outside

the OIG, or anonymously.

4. Access to GSA and contractor records. OIG auditors, analysts, criminal investigators,

and attorneys have unrestricted access to all records, reports, reviews, documents,

papers, and materials available to GSA and pertaining to agency programs and

activities. When performing reviews of contractor records and proposals, access to

information is provided by-statute, contract terms, and agreement between the

contractor and the Government. To facilitate the process of gaining access to

information, auditors, investigators, and attorneys carry credentials identifying them as

OIG officials. OIG Special Agents carry a badge and credentials.

Part 2. Audit Activities

1. General. This part provides guidance for agency officials needing information

regarding audit requests, types of audits, steps in the audit process, audit resolution,

and implementation reviews.

2. Audit requests. GSA managers and contracting officials can request audits of agency

programs and activities, and contractor records or proposals at any time. In addition,

the Office of Audits meets annually with the Heads of Services and Staff Offices and the

Regional Administrators to discuss areas of concern for internal audit consideration and

specific contract or proposal information for contract audits.

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3. Types of audits. The Office of Audits provides comprehensive coverage of GSA

operations through program audits, including financial, regulatory, and system audits

and assessments of internal controls. The office conducts contract audits in support of

GSA contracting officials to carry out their procurement responsibilities and obtain the

best value for federal customers and American taxpayers.

a. Program audits are independent appraisals of GSA programs, financial

management, operations, and activities that can be performed at any location where the

agency conducts business. These audits generally determine whether an entity is using

resources economically and efficiently, achieving desired program results, and

complying with applicable laws and regulations.

b. Contract audits are audits of contractor records and proposals in support of GSA

contracting officials. These audits relate to proposed or awarded contracts and can

include preaward and postaward audits, price reduction and defective pricing reviews,

contractor claims and termination reviews, and lease escalation evaluations.

(b.) c. Special audits are one-time audits of identified problem areas that are

performed on a priority basis. These audits are usually initiated by the Inspector

General or the Assistant Inspector General for Auditing. These audits can also be

requested by the Administrator, Deputy Administrator, Heads of Services and Staff

Offices (HSSOs), and Regional Administrators (RAs). Requests for special audits

should be directed to the IG, the Assistant Inspector General for Auditing, or the

appropriate Regional Inspector General for Auditing or Associate Deputy Assistant

Inspector General for Auditing.

4. Engagement letters. Engagement letters are usually issued to RAs or HSSOs to

announce the OIG's intention to initiate internal or special audits. Engagement letters

are not issued when the nature of the audit requires that the audit presence not be

disclosed in advance or the need for such notification has been preempted by a formal

entrance conference. For contract audits, the contracting officer usually informs the

contractor of the impending audit.

5. Entrance and exit conferences. Entrance and exit conferences are held with

responsible management officials immediately prior to initiation and upon completion

of the audit effort. Entrance conferences are to discuss the purpose, scope, and

principal features of the audit; and provide management officials the opportunity to

request specific coverage in relevant areas. Exit conferences are held following the

audit to discuss audit findings and results, giving management officials the opportunity

to ask questions and comment on the validity of the facts. Also, for all audits except

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contract audits, the exit conference allows management officials the opportunity to

comment on the reasonableness of audit conclusions and proposed recommendations.

a. Internal, and special audits. Entrance and exit conferences are held with RA,

HSSOs, or their designees.

b. Contract audits. Entrance and exit conferences (if applicable) are held with the

contractor.

6. Draft audit reports. Draft audit reports are issued to GSA management officials and,

for certain types of contract audits, to GSA contractors. The draft reports give the

auditee the opportunity to provide written comments that are included as an appendix

in the final audit report.

a. Internal and special audits. Draft audit reports are issued to Regional

Administrators or Heads of Service and Staff Offices. These GSA officials have 30

calendar days to provide written comments expressing either agreement or

disagreement with each of the conclusions and recommendations contained in the

report. These written comments are carefully analyzed when finalizing the audit

report.

b. Contract audits. Draft audit reports are issued for multiple award schedule

postaward audits. A draft report is transmitted to the contractor for written comment.

7. Final audit reports and resolution. In response to final audit reports, GSA managers

and contracting officers develop specific plans regarding actions to be taken in response

to audit findings and/or recommendations. Audit report resolution is the process by

which GSA managers and OIG officials agree upon the actions to be taken. Detailed

procedures for audit resolution are contained in GSA Order, Internal Audit Follow-up

Handbook (ADM P 2030.2D).

a. Internal and special audits. Resolution is reached based upon the formal written

action plans approved by the appropriate HSSO. For regional audits, the action plans

are prepared by the RA and submitted through the appropriate HSSO to the audit office

that issued the report.

b. Contract audits. Resolution is based upon an agreement on the Decision Record

submitted by the contracting officer to the audit office that issued the report.

8. Implementation reviews. Implementation reviews are conducted to determine

whether GSA management has adequately implemented actions agreed upon for

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resolved internal and special audit reports. While these reviews are normally

conducted after management has completed all corrective actions, interim reviews can

be conducted where complex or lengthy corrective action is specified by management.

Part 3. Inspection Activities

1. General. This part provides guidance for agency officials needing information

regarding inspection requests, types of inspections, steps in the inspection process,

inspection resolution, and implementation reviews.

2. Inspection requests. GSA managers can request inspections of agency programs and

activities by contacting the Director of the Office of Inspections and Forensic Auditing.

3. Definition of Inspection. The term “inspection” includes evaluations, inquiries, and

similar types of reviews that do not constitute an audit or a criminal investigation.

4. Types of inspections. The Office of Inspections and Forensic Auditing performs

inspections that are systematic and independent assessments of the design,

implementation, and/or results of GSA’s operations, programs, or policies. They

provide information that is timely, credible, and useful for agency managers,

policymakers, and others. Inspections can be used to determine efficiency,

effectiveness, impact, and/or sustainability of agency operations, programs, or

polices. They often recommend improvements and identify where administrative

action is necessary. Other uses of inspections include but are not limited to: providing

factual and analytical information; measuring performance; determining compliance

with applicable law, regulation, and/or policy; identifying savings and funds be put to

better use; sharing best practices or promising approaches; and assessing allegations of

fraud, waste, abuse, and mismanagement.

5. Engagement letters. Engagement letters are usually issued to RAs or HSSOs to

announce the OIG's intention to initiate inspections. Engagement letters are not issued

when the nature of the review requires that the inspection presence not be disclosed in

advance or the need for such notification has been preempted by a formal entrance

conference.

6. Entrance and exit conferences. Entrance and exit conferences are usually held by the

Director of the Office of Inspections and Forensic Auditing with responsible

management officials immediately prior to initiation and upon completion of the

inspection. Entrance conferences are held to discuss the purpose, scope, and principal

features of the inspection. They also provide GSA officials the opportunity to request

71

specific coverage in relevant areas. Exit conferences are held following the review to

discuss inspection findings and recommendations and offer management officials the

opportunity to ask questions and provide feedback.

7. Draft inspection reports. Draft inspection reports are issued to RAs or HSSOs. These

GSA officials have 30 calendar days to provide written comments expressing either

agreement or disagreement with each of the conclusions and recommendations

contained in the report. These written comments are analyzed and are included as an

appendix in the final inspection report.

8. Final reports and resolution. In response to final inspection reports, GSA managers

develop an action plan in response to the conclusions and recommendations contained

in the report. Report resolution is the process by which GSA managers and OIG

officials agree upon the action plan. Detailed procedures for inspection resolutions are

contained in GSA Order Internal Audit Follow-up Handbook (ADM P 2030.2D).

9. Implementation reviews. The Office of Inspections and Forensic Auditing conducts

reviews to determine whether GSA management has adequately implemented actions

agreed upon for resolved inspection reports. While these reviews are normally

conducted after management has completed all corrective actions, interim reviews can

be conducted where complex or lengthy corrective action is specified by management.

Part 4. Investigative Activities

1. General. This part provides guidance for agency officials needing information

regarding investigative requests, activities, reports, and referrals. This part also

provides information concerning actions to be taken by management in response to

investigative activities and reports.

2. Investigative requests. GSA managers and officials may request investigative

services or support by contacting the Special Agent in Charge in field locations or the

Office of Investigations at Headquarters.

3. Types of investigative activities. The Office of Investigations conducts criminal and

non-criminal investigations of GSA programs, operations and employees, and also

provides investigative support and assistance to GSA managers and officials.

a. Investigations are conducted of suspected or alleged wrongdoing involving GSA

operations, personnel, and funds. This includes Federal employees involved in and

with GSA programs and activities, GSA contractors providing services directly to GSA

or to other Federal agencies, and any persons or entities involved or participating in any

72

such suspected or alleged wrongdoing.

b. Investigative support and assistance is provided to GSA managers and officials as

follows:

(1) Security and personnel matters. Investigative assistance in these areas is

provided after the GSA Security officer's review and initial factual analysis determines

that activities warrant referral to the OIG.

(2) Tort claims and indebtedness matters. Investigative assistance in these areas

is provided to the GSA Office of General Counsel in connection with litigation that has

been initiated by, or against, GSA.

c. Liaison with the Department of Justice and U.S. Attorneys is provided on all

potential and referred civil and criminal fraud actions. Liaison and litigation assistance

is supplemented by the Counsel to the Inspector General.

d. Integrity Awareness Briefings are provided to GSA employees to heighten their

awareness of potential fraud, waste and mismanagement, methods for reporting

suspected wrongdoing, and the responsibility of the OIG to combat such activity.

4. Reporting suspected or alleged irregularity. The Office of Investigations receives

allegations and complaints about GSA operations nationwide. Suspected fraud, waste,

and mismanagement can be reported to any Special Agent in Charge, or by contacting

the OIG Hotline Officer in Washington, DC on (202) 501-1780, toll free on 800-424-5210,

or through the mail (GSA/OIG/Hotline, Washington, DC 20405). Potentially illegal or

improper activities can be reported confidentially, where the identity of the person is

not disclosed outside the OIG, or anonymously.

5. Investigative interviews. All GSA employees are required to cooperate fully with

OIG investigative special agents. Generally, OIG special agents request that managers

direct employees under their supervision to report for investigative interviews. Under

some conditions, notification to the immediate supervisor is undesirable and the special

agent notifies a higher level management official. To the extent possible, interviews are

arranged to avoid unnecessary inconvenience to employees or their office.

6. Investigative reports and referrals. The results of investigative activity are presented

in Reports of Investigation. The OIG does not have independent authority to prosecute

or litigate criminal or civil cases, or impose administrative sanctions. Accordingly,

Reports of Investigation are referred to those offices or individuals possessing these

73

authorities. The types of referrals contained in Reports of Investigation are:

a. Administrative referrals are addressed to the Administrator, the HSSO or

Regional Commissioner, whichever has line authority over the employee or program

area. Generally, these referrals are for non-prosecutable wrongdoing on the part of

GSA employees where disciplinary action by management may be warranted.

b. Criminal and Civil referrals are addressed to the Department of Justice, U.S.

Attorney offices, or State or local prosecutors. These referrals are for criminal

prosecution or civil litigation.

c. Suspension and Debarment referrals are addressed to the GSA Suspension and

Debarment Division. These referrals relate to wrongdoing on the part of a firm or

individual doing business with the Government. In some instances, these referrals are

made while contract fraud investigations are in progress.

d. Informational referrals are addressed to the Administrator, the HSSO, or the

Regional Commissioner, whichever has line authority over the employee or program

area. These referrals are used to inform officials when an investigation disclosed that a

complaint or allegation was unfounded.

e. Program Fraud Civil Remedies Act referrals are addressed to the GSA Office of

General Counsel for administrative litigation. These referrals involve false claims and

false statements with a value less than $150,000 that are litigated by the agency in lieu of

the Department of Justice.

7. Management action on referrals. Reports of Investigation addressed to GSA

management officials for consideration of administrative or suspension/debarment

action (or for informational consideration) reference GSA Form 9577, Disposition

Report which is used to inform the OIG of the actions' taken or to be taken by

management. Generally, the Disposition Report should be completed and returned

within 30 days. For Reports of Investigation involving criminal and civil referrals, GSA

management has no action responsibilities. However, GSA management may be

requested to consider appropriate administrative or suspension/debarment action

should the Department of Justice or U.S. Attorney decline prosecution.

8. Review of Disposition Report. Upon receipt of the completed Disposition Report

from GSA management, the Special Agent in Charge reviews the action proposed or

taken by management and evaluates whether the action is commensurate with the

investigative findings and agency regulations. If the action does not appear to be

commensurate, the Special Agent in Charge contacts the cognizant management official

to resolve concerns.

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Add Cost Reimbursement Capabilities Current State:

The MAS program allows for orders to be firm-fixed price, time-and-materials, and

labor-hours. MAS contracts do not allow for cost reimbursable work, and this lack of

functionality directly contributes to some agencies awarding their own IDIQ contracts

to the same companies already holding Schedule contracts for the same or similar work.

The statutory language authorizing GSA’s MAS program does not prohibit, or even

address, cost reimbursement contracting. 41 U.S.C. 3307 contains a general prohibition

against the use of cost type contracts solely for the acquisition of commercial items.

The differences in statutory approaches leads to differing conclusions as to whether cost

type task orders can be issued against otherwise appropriate commercial item

contracts, like GSA Schedule contracts.

Recommended Action:

Amend 41 U.S.C. 3307 to clarify the permissibility of issuing cost type task orders under

commercial item IDIQ contracts. Amend FAR 8, 12, and 16 accordingly. Amend MAS

ordering procedures accordingly to include cost reimbursement capabilities.

The Coalition recommends that GSA implement these changes by adding a Special Item

Number to each of their Services Schedules (03FAC, Professional Services Schedule, IT-

70, etc.) which would allow for cost-reimbursable task orders.

Rationale:

In dialogues with DoD, the Coalition has heard repeatedly and consistently that DoD

creates its own contracts (even if the Schedules already provide the solution needed)

simply because the Schedules lack cost reimbursement capabilities. Reducing contract

duplication is one of the Administration’s principal objectives, and it is an objective that

is shared by the Coalition. Until GSA Schedules allow cost reimbursement capabilities,

contract duplication will continue to persist.

For more information from the Coalition on cost reimbursement capabilities, please see:

• Contract Duplication Memorandum to DOD, GSA and OMB- Letter (11/16/12)

• A Welcome Message from GSA! (5/18/17)

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Line-in/Line-out:

Legislative Change:

SEC. ___. CLARIFICATION ON THE ABILITY TO USE COST-TYPE CONTRACTS

FOR THE ACQUISITION OF COMMERCIAL ITEMS

Section 3307(c) of title 41, United States Code, is amended—

(3) in paragraph (4) subparagraph (A), by inserting the clause “Nothing in

this provision shall prohibit the use of cost type task orders on indefinite delivery,

indefinite quantity contracts; and

(4) by revising paragraph (4) subparagraph (A)(ii) to: “a prohibition on the

use of contracts priced exclusively based on cost; and.”

(5) by inserting “or cost type task order” into paragraph (4) subparagraph (B)

and into subparagraph (C) (ii)

Changes to Existing Law:

TITLE 41, UNITED STATES CODE

§3307. Preference for commercial items

* * *

(4) Provisions relating to types of contracts.-

(A) Types of contracts that may be used.-The Federal Acquisition Regulation

shall include, for acquisitions of commercial items-

(i) a requirement that firm, fixed price contracts or fixed price with economic

price adjustment contracts be used to the maximum extent practicable;

(ii) a prohibition on use contracts priced exclusively based on cost; and

(iii) (ii)subject to subparagraph (B), authority for use of a time-and-materials or

labor-hour contract for the procurement of commercial services that are

commonly sold to the general public through those contracts and are purchased

by the procuring agency on a competitive basis.

(iv) Nothing in this provision shall prohibit the use of cost type task orders on

indefinite quantity, indefinite delivery contracts.

(B) When time-and-materials or labor-hour contract, or cost type task order may

be used. A time-and-materials or labor-hour contract cost type task order may be

used pursuant to the authority referred to in subparagraph (A)(iii)-

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(i) only for a procurement of commercial services in a category of commercial

services described in subparagraph (C); and

(ii) only if the contracting officer for the procurement-

(I) executes a determination and findings that no other contract type is

suitable;

(II) includes in the contract a ceiling price that the contractor exceeds at its

own risk; and

(III) authorizes a subsequent change in the ceiling price only on a

determination, documented in the contract file, that it is in the best interest of

the procuring agency to change the ceiling price.

(C) Categories of commercial services.-The categories of commercial services

referred to in subparagraph (B) are as follows:

(i) Commercial services procured for support of a commercial item, as

described in section 103(5) of this title.

(ii) Any other category of commercial services that the Administrator for

Federal Procurement Policy designates in the Federal Acquisition Regulation for

the purposes of this subparagraph on the basis that-

(I) the commercial services in the category are of a type of commercial

services that are commonly sold to the general public through use of time-and-

materials or labor-hour contracts or cost type task order; or

(II) it would be in the best interests of the Federal Government to authorize

use of time-and-materials or labor-hour contracts, or cost type task order for

purchases of the commercial services in the category.

Regulatory Changes:

FAR 16.301-3 Limitations.

(a) A cost-reimbursement contract may be used only when −

(1) The factors in 16.104 have been considered;

(2) A written acquisition plan has been approved and signed at least one level

above the contracting officer;

(3) The contractor’s accounting system is adequate for determining costs applicable

to the contract or order; and

(4) Prior to award of the contract or order, adequate Government resources are

available to award and manage a contract other than firm-fixed-priced (see 7.104(e)).

This includes appropriate Government surveillance during performance in accordance

with 1.602-2, to provide reasonable assurance that efficient methods and effective cost

controls are used.

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(i) Designation of at least one contracting officer’s representative (COR) qualified

in accordance with 1.602-2 has been made prior to award of the contract or order; and

(ii) Appropriate Government surveillance during performance to provide

reasonable assurance that efficient methods and effective cost controls are used.

(b) The use of cost-reimbursement contracts is prohibited for the acquisition of

commercial items (see Parts 2 and 12). Nothing in this provision shall prohibit the use of

cost reimbursable type task orders on indefinite quantity, indefinite delivery contracts.

FAR 12.207 Contract type.

(a) Except as provided in paragraph (b) of this section, agencies shall use firm-fixed-

price contracts or fixed-price contracts with economic price adjustment for the

acquisition of commercial items.

(b)(1) A time-and-materials contract or labor-hour contract (see subpart 16.6), or cost-

reimbursable type task order contract may be used for the acquisition of commercial

services items when—

(i) The item service is acquired under a contract awarded using—

(A) Competitive procedures (e.g., the procedures in 6.102, the set-aside

procedures in subpart 19.5, or competition conducted in accordance

with Part 13);

(B) The procedures for other than full and open competition in 6.3

provided the agency receives offers that satisfy the Government’s

expressed requirement from two or more responsible offerors; or

(C) The fair opportunity procedures in 16.505 (including discretionary

small business set-asides under 16.505(b)(2)(i)(F)), if placing an order

under a multiple-award delivery-order contract; and

(ii) The contracting officer—

(A) Executes a determination and findings (D&F) for the contract, in

accordance with paragraph (b)(2) of this section (but see paragraph (c) of

this section for indefinite-delivery contracts), that no other contract type

authorized by this subpart is suitable;

(B) Includes a ceiling price in the contract or order that the contractor

exceeds at its own risk; and

(C) Prior to increasing the ceiling price of a time-and-materials or labor-

hour, or cost reimbursable contract or order, shall—

(1) Conduct an analysis of pricing and other relevant factors to

determine if the action is in the best interest of the Government;

(2) Document the decision in the contract or order file; and

(3) When making a change that modifies the general scope of—

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(i) A contract, follow the procedures at 6.303;

(ii) An order issued under the Federal Supply Schedules,

follow the procedures at 8.405-6; or

(iii) An order issued under multiple award task and delivery

order contracts, follow the procedures at 16.505(b)(2).

(2) Each D&F required by paragraph (b)(1)(ii)(A) of this section shall contain sufficient

facts and rationale to justify that no other contract type authorized by this subpart is

suitable. At a minimum, the D&F shall—

(i) Include a description of the market research conducted (see 10.002(e));

(ii) Establish that it is not possible at the time of placing the contract or order to

accurately estimate the extent or duration of the work or to anticipate costs with

any reasonable degree of confidence;

(iii) Establish that the requirement has been structured to maximize the use of

firm-fixed-price or fixed-price with economic price adjustment contracts (e.g., by

limiting the value or length of the time-and-material/labor-hour contract or

order; establishing fixed prices for portions of the requirement) on future

acquisitions for the same or similar requirements; and

(iv) Describe actions planned to maximize the use of firm-fixed-price or fixed-

price with economic price adjustment contracts on future acquisitions for the

same requirements.

(3) See 16.601(d)(1) for additional approval required for contracts expected to extend

beyond three years.

(4) See 8.404(h) for the requirement for determination and findings when using Federal

Supply Schedules.

(c)(1) Indefinite-delivery contracts (see subpart 16.5) may be used when—

(i) The prices are established based on a firm-fixed-price or fixed-price with

economic price adjustment; or

(ii) Rates are established for commercial services acquired on a time-and-

materials, or labor-hour or cost-reimbursable basis.

(2) When an indefinite-delivery contract is awarded with services priced on a time-and-

materials or labor-hour or cost-reimbursable basis, contracting officers shall, to the

maximum extent practicable, also structure the contract to allow issuance of orders on a

firm-fixed-price or fixed-price with economic price adjustment basis. For such contracts,

the contracting officer shall execute the D&F required by paragraph (b)(2) of this

section, for each order placed on a time-and-materials or labor-hour or cost-

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reimbursable basis. Placement of orders shall be in accordance with subpart 8.4 or 16.5,

as applicable.

(3) If an indefinite-delivery contract only allows for the issuance of orders on a time-

and-materials or labor-hour or cost-reimbursable basis, the D&F required by paragraph

(b)(2) of this section shall be executed to support the basic contract and shall also

explain why providing for an alternative firm-fixed-price or fixed-price with economic

price adjustment pricing structure is not practicable. The D&F for this contract shall be

approved one level above the contracting officer. Placement of orders shall be in

accordance with subpart 16.5.

(d) The contract types authorized by this subpart may be used in conjunction with an

award fee and performance or delivery incentives when the award fee or incentive is

based solely on factors other than cost (see 16.202-1 and 16.203-1).

(e) Use of any contract type other than those authorized by this subpart to acquire

commercial items is prohibited.

FAR 8.404 Use of Federal Supply Schedules.

(d) Pricing.

(i) Supplies offered on the schedule are listed at fixed prices. Services offered on

the schedule are priced either at hourly rates, or at a fixed price for performance

of a specific task (e.g., installation, maintenance, and repair).

(ii) In addition to (i) above, Federal Supply Schedule contracts may address

allowable cost in order to facilitate the award of cost reimbursable type task

orders.

(iii) (ii) GSA has already determined the prices of supplies and fixed-price

services, and rates for services offered at hourly rates, under schedule contracts

to be fair and reasonable. Therefore, ordering activities are not required to make

a separate determination of fair and reasonable pricing, except for a price

evaluation as required by 8.405-2(d). By placing an order against a schedule

contract using the procedures in 8.405, the ordering activity has concluded that

the order represents the best value (as defined in FAR 2.101) and results in the

lowest overall cost alternative (considering price, special features, administrative

costs, etc.) to meet the Government’s needs. Although GSA has already

negotiated fair and reasonable pricing, ordering activities may seek additional

discounts before placing an order (see 8.405-4).

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Improve the eBuy Platform

Current State:

Current restrictions within the General Services Administration’s (“GSA”) platform

reduce the efficiency of the Multiple Award Schedules (“MAS”) program. Specifically,

not all MAS contractors receive adequate notice of opportunities, and thus, may not be

aware of teaming opportunities and may not have sufficient time to respond to specific

agency requirements. Ultimately, these inefficiencies negatively impact the Federal

government’s access to innovative solutions.

Recommended Action:

The Coalition recommends that the following changes be made to the eBuy platform:

• Increase the transparency of eBuy by enabling contractors under a specific

Special Item Number (“SIN”) to receive notifications for all opportunities,

including small business set-asides.

o In addition, publish old Request for Quotations (“RFQ”) on eBuy.

• To enhance the data analytic capabilities of the Federal government, modify the

eBuy platform so that it collects the transactional data of Federal customers.

• Enhance the usability of the platform by making changes that are designed to

improve the user interface.

Rationale:

Through these recommended changes, the eBuy platform would enable the Federal

government to realize lower prices by increasing efficiency and competition. Further, it

would promote better buying decisions by Federal agencies, as it would provide a data-

driven analysis for these agencies to use when procuring goods and services.

Line-in/Line-out:

None required, GSA already has the authority to manage the eBuy system.

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Determining Fair and Reasonable Pricing on Schedule Orders

Current State:

On March 13, 2014, Defense Procurement and Acquisition Policy (DPAP) issued a class

deviation “clarifying” (i.e. establishing) that DoD ordering activities are responsible for

determining prices fair and reasonable for Blanket Purchase Agreements (BPAs), task

orders, and delivery orders issued under GSA’s Multiple Award Schedule program.

This deviation has generated significant discussion, analysis, and debate in the

procurement community regarding the balance between procedures and outcomes

when using the GSA’s Schedules streamlined ordering processes.

The impetus behind the DPAP deviation is a growing concern that, when using the

GSA Schedules program, DoD contracting officers are not doing any analysis of

proposed prices at the BPA and task order level. Rather, DoD contracting officers

merely are relying on the language in FAR 8.4 that states GSA has already determined

Schedule prices fair and reasonable, and, therefore, ordering activities are not required

to make a separate determination of fair and reasonable pricing. See FAR 8.404(d). In

essence, the concern is that the FAR 8.4 language promotes a lack of due diligence on

the part of DoD contacting officers in evaluating task order and BPA pricing under the

GSA schedules program. It should be noted that FAR 8.4 actually includes additional

price analysis requirements for orders and BPAs requiring a statement of work.

DPAP’s concern is understandable. Some due diligence by the contracting officer is

appropriate to ensure that the government is getting a fair deal at the task order level

under multiple award contracts, including the GSA Schedules. At the same time,

however, a balance should be struck recognizing that one of the important benefits of

multiple award contracts is the streamlined task order competition process, a process

mandated by statute and regulation. Currently, that balance has not been struck. Our

members report that some DOD Contracting Officers are asking for cost data (and in

some cases Cost and Pricing Data Certifications, as well) on schedule orders. Such

requests are not appropriate or helpful for commercial item acquisition and add

significant cost to contractors which, ultimately, will be passed on to the government.

Importantly, the deviation establishes an approach that is inconsistent with the

treatment of orders under multiple award contracts. A review and comparison of FAR

16.505(b)(3) and FAR 8.404(d) reveals guidance that is essentially the same regarding

the determination of fair and reasonable pricing at the order level. In both cases, the

regulatory guidance informs contracting officers that if the prices are established at the

contract level, the pricing policies and procedures of FAR 15.4 do not apply. FAR

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8.404(d) states that since GSA has determined contract prices for supplies and service

fair and reasonable; the ordering activity does not have to do a separate determination

of fair and reasonable pricing at the order level. FAR 16.505(b)(3) states that:

“[i]f the contract did not establish the price for the supply or service, the

contracting officer must establish prices for each order using the policies and

methods in subpart 15.4.” [Emphasis added.]

As such, FAR 16.505(b)(3) also makes clear that if the prices have been established at

the contract level under a multiple award contract, then the contracting officer does

not have to make a fair and reasonable price determination pursuant to FAR 15.4.

Recommended Action:

1. Add language to clarify that, prior to the award of task and delivery orders place

under all IDIQ contracts (including those placed against the GSA Multiple

Award schedule), contracting officials must exercise due diligence to ensure that

the government is getting a fair and reasonable pricing for the item purchased in

light of the particular circumstances of the order.

2. Add language to clarify that the formal price negotiation methods of FAR 15.4

are not required or encouraged. Requests for certified cost and pricing data are

not authorized.

3. Clarify that additional fair and reasonable price determinations are not required

for orders below the micro-purchase threshold.

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Line-in/Line-out:

Regulatory Change:

Class Deviation—Determination of Fair and Reasonable Prices When Using Federal

Supply Schedule Contracts

8.404(d) Pricing. (DEVIATION)

Supplies offered on the schedule are listed at fixed prices. Services offered on the

schedule are priced either at hourly rates, or at a fixed price for the performance of a

specific task (e.g. installation, maintenance, and repair). GSA has determined the prices

of supplies and fixed-price services, and rates for services offered at hourly rates, to be

fair and reasonable for the purpose of establishing the schedule contract. GSA’s

determination does not relieve the ordering activity contracting officer from the

responsibility of making a determination of fair and reasonable pricing for individual

orders above the micro-purchase threshold, BPAs, and orders under BPAs above the

micro-purchase threshold, using the proposal analysis techniques at 15.404-1. The

complexity and circumstances of each acquisition should determine the level of detail of

the analysis required. Requests for certified cost and pricing data are not authorized.

16.505(b)(3) Pricing orders. (DEVIATION)

If the contract did not establish the price for the supply or service, the contracting

officer must establish prices for each order using the policies and methods

in subpart 15.4. A determination of fair and reasonable pricing does not relieve the

ordering activity contracting officer from the responsibility of making a determination

of fair and reasonable pricing for individual orders above the micro-purchase threshold.

The complexity and circumstances of each acquisition should determine the level of

detail of the analysis required.

84

Reform Procedures for Blanket Purchase Agreements

Current State:

In 2011, the FAR Council implemented new ordering procedures for the GSA

Schedules, which created competition requirements, consistent with Section 863 of the

2009 National Defense Authorization Act (NDAA). The Coalition supported the effort

to modernize the competition requirements. The FAR Council’s interim rule to

implement Section 863, however, also created unduly restrictive procedures for the

establishment and use of Blanket Purchase Agreements (BPAs) under the Schedules

program. These restrictions included limiting single award BPAs to a one-year base

period and four one-year options, directing contracting officers to give preference to

multiple award BPAs over single award BPAs, and limiting the value of single award

BPAs to $112 million.

Recommendation:

Remove the restrictions on single award BPAs.

Rationale:

Multiple and single award BPAs are both valuable acquisition tools that should be

available to contracting officers. Indeed, there are many situations where multiple

award BPAs are not the best fit given an agency’s requirements, especially where an

agency has well-defined requirements for a specific recurring need. In such

circumstances, a single award BPA likely will provide a cost-effective solution to meet

the agency’s needs.

85

Line-in/Line-out:

FAR Change:

Subpart 8.4 Federal Supply Schedules

8.405-3 Blanket purchase agreements (BPAs).

(a) Establishment.

****

(3)(i) The ordering activity contracting officer shall, to the maximum extent

practicable, give preference to establishing multiple-award BPAs, rather than

establishing a single-award BPA.

(ii) No single-award BPA with an estimated value exceeding $112 million

(including any options), may be awarded unless the head of the agency

determines in writing that—

(A) The orders expected under the BPA are so integrally related that

only a single source can reasonably perform the work;

(B) The BPA provides only for firm-fixed priced orders for—

(1) Products with unit prices established in the BPA; or

(2) Services with prices established in the BPA for specific tasks to

be performed;

(C) Only one source is qualified and capable of performing the work at

a reasonable price to the Government; or

(D) It is necessary in the public interest to award the BPA to a single

source for exceptional circumstances.

(iii) The requirement for a determination for a single-award BPA greater

than $112 million is in addition to any applicable requirement for a limited-

source justification at 8.405-6. However, the two documents may be

combined into one document.

(i)(iv) In determining how many multiple-award BPAs to establish or that

a single-award BPA is appropriate, the contracting officer should consider

the following factors and document the decision in the acquisition plan or

BPA file:

(A) The scope and complexity of the requirement(s);

(B) The benefits of on-going competition and the need to periodically

compare multiple technical approaches or prices;

(C) The administrative costs of BPAs; and

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(D) The technical qualifications of the schedule contractor(s).

****

(4) Minimum documentation. The ordering activity contracting officer shall

include in the BPA file documentation the—

i. Schedule contracts considered, noting the contractor to which the BPA

was awarded;

ii. Description of the supply or service purchased;

iii. Price;

iv. Required justification for a limited-source BPA (see 8.405-6), if

applicable;

v. Determination for a single-award BPA exceeding $112 million, if

applicable (see (a)(3)(ii)) of this section);

vi. Documentation supporting the decision to establish multiple-award

BPAs or a single-award BPA (see (a)(3)(iv));

vii. Evidence of compliance with paragraph (b) of this section, for

competitively awarded BPAs, if applicable; and

viii. Basis for the award decision. This should include the evaluation

methodology used in selecting the contractor, the rationale for any

tradeoffs in making the selection, and a price reasonableness

determination for services requiring a statement of work.

****

(d) Duration of BPAs.

a. Multiple-award BPAs generally should not exceed five years in length,

but may do so to meet program requirements.

b. A single-award BPA shall not exceed one year. It may have up to four

one-year options. See paragraph (e) of this section for requirements

associated with option exercise.

c. Contractors may be awarded BPAs that extend beyond the current term of

their GSA Schedule contract, so long as there are option periods in their

GSA Schedule contract that, if exercised, will cover the BPA’s period of

performance.

87

Business Case Analyses for Certain Interagency and Agency-Specific Acquisitions Current State:

In 2011, the Office of Federal Procurement Policy (OFPP), issued a memorandum on

“The Development, Review, and Approval of Business Cases for certain Interagency

and Agency-Specific Acquisitions.” The memo outlines the process for developing,

reviewing, and approving business cases to support the establishment and renewal of

GWACs, multi-agency contracts, BPAs, and agency-specific contracts.

Recommended Action:

Update the business case process to make the agency business cases, as well as the

OFPP approvals and rationales available to the public.

Rationale:

The memorandum was issued to encourage government buyers to utilize existing

contract vehicles before creating their own contracts and engaging in the expensive

process of contract duplication. Since the issuance of the memo, the Coalition is not

aware of a single business case that has been rejected and few agencies will make their

businesses cases available to public. The business cases, as well as the determinations

from OFPP, are important documents which should be shared with industry as part of

the overall review and approval process.

Additionally, while FAR 17.502-1 includes the business case process, the clause omits

agency-specific contracts, even though they are explicitly included in the OFPP

memorandum. This oversight should be corrected immediately.

88

Line-in/Line-out:

FAR Change:

Subpart 17.5—Interagency Acquisitions

17.502-1 General.

***

(c) Business-case analysis requirements for multi-agency contracts and governmentwide

acquisition contracts. In order to establish a multi-agency or governmentwide acquisition

contract or covered agency-specific contract or covered agency-specific blanket

purchase agreement, a business-case analysis must be prepared by the servicing agency

and approved in accordance with the Office of Federal Procurement Policy (OFPP)

business case guidance, available

at http://www.whitehouse.gov/sites/default/files/omb/procurement/memo/develo

pment-review-and-approval-of-business-cases-for-certain-interagency-and-agency-

specific-acquisitions-memo.pdf. The business-case analysis shall—

(1) Consider strategies for the effective participation of small businesses during

acquisition planning (see 7.103(u));

(2) Detail the administration of such contract, including an analysis of all direct and

indirect costs to the Government of awarding and administering such contract;

(3) Describe the impact such contract will have on the ability of the Government to

leverage its purchasing power, e.g., will it have a negative effect because it dilutes other

existing contracts;

(4) Include an analysis concluding that there is a need for establishing the multi-

agency contract; and

(5) Document roles and responsibilities in the administration of the contract.

In addition to being posted on the MAX website, the agency must publicly release the

business case analysis.

89

Shifting the Preference from Open Market to Existing Vehicles

Current State:

FAR 17.502-2 requires that before an agency can utilize a GWAC they must complete a

Determinations and Findings in accordance with the Economy Act. The clause creates a

barrier for the use of the GWAC and to a lesser extent, the GSA Schedules program.

Recommended Action:

Remove the requirement for a determinations and findings for the use of OMB-

approved GWACs. Make corresponding changes for the GSA Schedules Program

Alternatively, DPAP could issue a blanket waiver for all GWACs and Schedules, which

would amount to the same effect.

Rationale:

The GWACs are popular, well-respected, and effective contract vehicles, among both

Government and industry stakeholders, and it is not necessary to maintain such an

onerous process for using them. Additionally, the Economy Act does not require that

each individual order be approved in this manner, only that the “the head of the

ordering agency or unit decides the order is in the best interest of the United States

Government.”

Encouraging the use of existing contracts will immediately reduce contract duplication

and lead to savings for the Government.

For more information from the Coalition on contract duplication and the utilization of

existing vehicles, please see:

• Revisiting Coalition Recommendations for Streamlining DoD Contracting

90

Line-in/Line-out:

Legislative Change:

SEC. ___. USE OF INTERAGENCY CONTRACTS

(a) IN GENERAL.—Section 865(b)(1) of the National Defense Authorization Act for

Fiscal Year 2009 (Public Law 110-417; Stat. 4550) is amended—

(1) by striking subparagraph (B); and

(2) by redesignating subparagraph (C) as subparagraph (B)

(b) Section 865(d)(3) of the National Defense Authorization Act for Fiscal Year 2009

(Public Law 110-417; Stat. 4550) is amended—

(1) by deleting Federal Supply Schedules above $500,000 and Government wide

acquisition contracts

Changes to Existing Law:

SEC. 865 PREVENTING ABUSE OF INTERAGENCY CONTRACTS

****

(b) REGULATIONS REQUIRED.—

(1) IN GENERAL.—Not later than one year after the date of enactment of this

Act, the Federal Acquisition Regulation shall be revised to require that all interagency

acquisitions—

(A) include a written agreement between the requesting agency and the

service agency assigning responsibility for the administration and management of the

contract;

(B) include a determination that an interagency acquisition is the best

procurement alternative; and

(C)(B) include sufficient documentation to ensure an adequate audit.

****

(d) DEFINITIONS.—In this section:

****

(3) The term “interagency contract” means a procedure by which an executive

agency needing supplies or services (the requesting agency) obtains them from another

executive agency (the servicing agency). The term includes acquisitions under section

1535 of title 31, United States Code (commonly referred to as the “Economy Act”),

Federal Supply Schedules over $500,000, and Government wide acquisition contracts.

91

****

FAR Changes:

17.500 Scope of subpart.

(a) This subpart prescribes policies and procedures applicable to all interagency

acquisitions under any authority, except as provided for in paragraph (c) of this section.

In addition to complying with the interagency acquisition policy and procedures in this

subpart, nondefense agencies acquiring supplies and services on behalf of the

Department of Defense shall also comply with the policy and procedures

at subpart 17.7.

(b) This subpart applies to interagency acquisitions, see 2.101 for definition, when—

(1) An agency needing supplies or services obtains them using another agency’s

contract; or

(2) An agency uses another agency to provide acquisition assistance, such as

awarding and administering a contract, a task order, or delivery order.

(c) This subpart does not apply to—

(1) Interagency reimbursable work performed by Federal employees (other than

acquisition assistance), or interagency activities where contracting is incidental to the

purpose of the transaction; or

(2) Orders of $550,000 or less issued against Federal Supply Schedules.

(3) “Governmentwide acquisition contract (GWAC)” means a task-order or

delivery-order contract for information technology established by one agency for

Governmentwide use that is operated—

(1) By an executive agent designated by the Office of Management and Budget

pursuant to 40 U.S.C. 11302(e); or

(2) Under a delegation of procurement authority issued by the General Services

Administration (GSA) prior to August 7, 1996, under authority granted GSA by former

section 40 U.S.C. 759, repealed by Pub. L. 104-106. The Economy Act does not apply to

orders under a Governmentwide acquisition contract as defined in FAR 2.101.

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Assisted Acquisition Centers of Excellence Current State:

In accordance with FAR 17.502-1, DOD must complete a determination of best

procurement approach in order to use assisted acquisition services, including

acquisitions managed by GSA’s FEDSIM, an organization that is considered by many

Coalition members to be one of the most effective contracting centers in the Federal

Government. FEDSIM successfully handles billions of dollars worth of procurements

each year and has a 99% protest win rate. These determinations, however, delay the

procurement process and ultimately duplicate the requirements in FAR 7.1—

Acquisition Plans.

Recommended Action:

Create a process whereby these determinations can be waived for assisted acquisition

centers that have a history of contracting excellence.

Rationale:

Assisted acquisitions play a crucial role in the procurement process, particularly if a

contracting office does not have the expertise or personnel to conduct complex high-

value procurements. Organizations, such as FEDSIM, may have experience and

capabilities to provide the best outcomes for DOD buyers, yet buyers may be deterred

from using them because of this process.

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Line-in/Line-out:

Legislative Change:

SEC. ___. ASSISTED ACQUISITION CENTERS OF EXCELLENCE

(c) IN GENERAL.—Section 865(b)(1) of the National Defense Authorization Act for

Fiscal Year 2009 (Public Law 110-417; Stat. 4550) is amended—

(1) by adding the following new paragraph:

(2) EXCEPTIONS FOR CERTAIN ASSISTED ACQUISITION CENTERS.—The Director

of the Office of Management and Budget may designate ‘Assisted Acquisition

Centers of Excellence’ which shall be exempted from the requirement in

17.502-1(a)(1). Assisted Acquisition Centers of Excellence shall demonstrate

a history of:

i. Meeting schedule, performance, and delivery requirements

ii. Cost effectiveness for agency buyers”

FAR Change:

Subpart 17.5 Interagency Acquisitions

17.502 Procedures

17.502-1 General.

****

(d) Based on guidance developed by OFPP, the OMB Director may designate ‘Assisted

Acquisition Centers of Excellence’ which shall be exempted from the requirement in

17.502-1(a)(1). Assisted Acquisition Centers of Excellence shall demonstrate a history of:

(1) Meeting schedule, performance, and delivery requirements

(2) Cost effectiveness for agency buyers

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Online Marketplaces

Current State: Recently, policy discussion has focused on the potential of commercial online marketplace platforms to streamline the acquisition process. When considering the potential of these online marketplace platforms, however, it is important to recognize that, although government and commercial entities may have similar operational processes, they are not identical. Therefore, it is imperative that any proposed online marketplace platform solution account for the various legal and policy drivers, as well as the mission of the government, which may preclude the wholesale adoption of this commercial practice. Recommended Action: The Coalition recommends that, prior to any possible adoption of commercial online marketplace platforms by the government for the purpose of procuring commercial items, that rigorous research and vetting be undertaken to evaluate and understand the various implications that such platforms could have on the Federal procurement process. Rationale: Although the concept of an online commercial marketplace solution could potentially be an important undertaking for the Federal procurement community, to date, there has not been significant deliberation over, and accounting for, what the adoption of a such a solution would mean for the Federal procurement process. Indeed, Congress has yet to hold any hearings to examine the key policy concerns that could potentially arise from the wholesale adoption of this commercial practice and there is lack of available research related to how the government would operationalize this concept. Line-in/Line-out: None.